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Hedge fund strategy
Global Tactical Opportunities
Geopolitics characterises the investment environment. The trade is what follows from reading it.
Key takeaways
- The process identifies key moments in the future, then asks whether a strategic or a tactical trade can be implemented.
- Risk and reward are assessed before the expression is chosen: directional, or relative value.
- Risk management is intrinsic to the process rather than a stage that follows it.
Strategy facts
- Vehicle
- Actively managed certificate
- Class
- Hedge fund
- Currency
- USD
- Inception
- Product code
- CE1640JCG
- ISIN
- XS2741467372
- Status
- Open
Documents
Monthly report
Term sheet
Why geopolitics
Gottfried Wilhelm Leibniz first used the term in 1679, though geopolitics only came into common use at the end of the nineteenth century. It became important in Germany, then in Great Britain and the United States. After the Second World War it was no longer taught in universities, wrongly accused of having fed extremist ideology. The Cold War revived the need for governments and citizens to hold a clearer view of the world, and since the 1980s the field has demonstrated its usefulness.
Oil prices, central-bank policy, migration, currency volatility, and correlation and decorrelation between asset classes are often generated by geopolitics. The implications of a trade war are read more easily through it than through the flows.
How the process works
Navigating the geopolitical and macro landscapes to capture the rise of a macro thematic, the process identifies key moments in the future and asks whether a strategic or a tactical trade can be implemented. The risk and reward are then analysed, and a directional or a relative-value strategy is selected.
Alongside the fundamental reading, a quantitative process tracks extreme correlation and decorrelation across criteria. The dashboards and studies supporting the risk metrics are generated with Quantilia.
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Dysfunctions are worsened by intervention, by volatility and by correlation breakdown.
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Coherent idea generation is the initial state of the investment process.
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Investment and risk management are intrinsic to each other, not sequential.
