There’s a lot of chatter these days about the extent to which hedging doesn’t make any sense.
That, as Bloomberg’s Richard Breslow observed earlier this week, is a sad state of affairs.
Hedging costs money and that cost is compounded by the lost carry on trades that your peers might be holding on to in order to squeeze the last few basis points of compression out of the rally. So if you’re trying to be cautious but you’re accountable to investors, you’re doubly f*cked if you try to hedge your positions. Call it “performance anxiety.”
Earlier this month I talked about my “favorite doorstop” – gold – and it’s usefulness as a hedge against a French election-inspired meltdown.
Well, for those wondering what money managers think are the best hedges against protectionism – a populist policy darling – I bring you the following chart from BofAML’s global fund manager survey.