Analyses
Global Macro: Capitalizing on Inefficiencies in Far Corners of the Market
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Insight Article
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novembre 12, 2025
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Global Macro: Capitalizing on Inefficiencies in Far Corners of the Market
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novembre 12, 2025
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Global Macro: Capitalizing on Inefficiencies in Far Corners of the Market
Global Macro: Capitalizing on Inefficiencies in Far Corners of the Market |
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The crosscurrents in today’s global markets pose unique challenges for investors. Whether it’s potential trade wars, China’s advances in AI, NATO’s commitment to boost defense spending, Argentina’s return to capitalism, or Taiwan revaluing its currency, the ability to interpret the investment implications has never been more important.
Such crosscurrents in our view inevitably give rise to market mispricings and inefficiencies, which in turn create investment opportunities for those with the resources, expertise and flexibility to uncover them. Here we outline how our Global Macro strategy seeks to do just that, and capture value for our investors.
How Global Macro Absolute Return Can Benefit Portfolios
As an absolute return strategy, Global Macro seeks to provide investors with key objectives that include:
- Aims to consistently strong risk-adjusted returns.
- Limited drawdowns in absolute terms and relative to other asset classes.
- Effective portfolio diversification,* with near zero sensitivity to traditional stock and bond markets.
These objectives offer investors broad flexibility in terms of Global Macro portfolio positioning:
- Liquid alternative. Global Macro tends to be implemented in daily-liquid vehicles, seeking historical diversification benefits without repackaging traditional market risks.
- Complement to fixed income. The strategy aims to pursue the benefits of fixed income: yield and downside mitigation, yet with limited sensitivity to changes in interest rates and credit spreads as well as equities.
- Bridge between bonds and stocks. Global Macro’s historical return above 90-day T-bills places it in between the long-term fixed income and equity premium.
- Flexible allocation in keeping with market view. Investors may weight the strategy more heavily when traditional assets appear rich, with smaller weightings when the outlook for traditional assets is more positive.
The Global Macro Difference
Casting a broad net. Global Macro’s multidisciplinary team comprises more than 50 investment professionals in Boston, London, Singapore, New York, Washington, D.C., Abu Dhabi and Hong Kong, and covers a universe of more than 130 countries. The strategy employs a decentralized investment process aimed at unbiased portfolio construction, where capital is allocated to positions with the most attractive risk/return potential.
Given that only about 20 countries are considered developed by most, significant resources have been devoted toward building a proprietary infrastructure dedicated to uncovering value in emerging markets, which are more likely to have pricing inefficiencies. This allows Global Macro to cast its net more broadly than most global funds, which often confine themselves to countries in the major benchmarks, which often overlook some of the most compelling investment opportunities.
Intense country focus. The investment team generates ideas through intense focus on individual countries, especially those that are poised for structural change. For example, at this point in time countries like Egypt, Kazakhstan and Argentina are enacting positive reforms to monetary and fiscal policy, exchange rates and empowerment of the private sector.
Global Macro seeks to anticipate such initiatives before the market recognizes their potential value. The team’s analysts sift through diverse sources of information encompassing politics, fiscal, monetary and trade policy, and other relevant indicators. Such sources often flow from longstanding connections with policy makers and market participants in a range of countries, developed through extensive travel and regular contact.
Precise risk payoff potential. Global Macro’s proprietary research also pinpoints the risk factors that can generate positive performance, and which may be implemented as long or short positions, while also hedging away or not introducing factors that may not.
For example, consider a country that is experiencing slowing growth and entering an interest-rate cutting cycle to support the economy. It may be quite attractive to have local duration exposure in this country as rates come down, but not the currency, which may come under pressure. As such, isolating duration by buying a local bond and hedging the currency—or even shorting the currency—may be one of the best ways to express that view and drive performance. This process “deconstructs” the bond into the risk factors that influence its price.
Access to markets. Trading is another important, and related, capability that sets Global Macro apart, thanks to a 14-person trading and operations desk embedded within the team. Our team’s collective expertise aims to provide efficient market access and intimate knowledge of unique market infrastructures across 130 countries. This infrastructure helps to provide unparalleled breadth, unique efficiencies and cost-effective executions. Investors lacking such an infrastructure may not have access to certain investment opportunities or may face lengthy lead times to establish local clearance and settlement arrangements and for compliance with varying registration and licensing procedures.
The bottom line. We strategically implement insights from Global Macro’s proprietary research across our strategies, guided by the risk and reward potential in sovereign credit, interest rates, currency markets and other factors for more than 130 countries.