César Pérez Ruiz shares his top 3 investment themes of the month
1. Macro hedge funds
High volatility across asset classes and significant performance dispersion within asset classes are providing ample opportunities for global macro strategies to generate alpha while taking limited directional risk. The chance we are in a ‘regime shift’ marked by higher structural inflation and greater political tensions open up new avenues for these strategies.
2. Short-duration investment-grade credits in the US and Asia
Rising bond yields increase the attractiveness of high-quality short-term corporate bonds in the US. We believe investment-grade (IG) credits of up to four years duration represent potential ‘safe carry’ investments at the moment. We also like short-duration hard-currency Asian IG bonds, which continue to offer attractive spreads per turn of leverage.
3. Volatility as an asset class
We see elevated market volatility as providing opportunities. Derivatives can be used to monetise high volatility and mitigate portfolio risks, with ample scope to employ options to exploit tactical opportunities in increasingly unsettled bond and currency markets.