As a strategy, Global Macro is a unique diversifier compared to traditional asset classes and other alternative investments. This is because correlations decline during recessionary periods whereas the correlation of most other asset classes actually increases during recessionary times which is when investors most need a decreased correlation for downside protection.
Higher Risk-Adjusted Return
From 1997 to 2011, Global Macro had the highest returns of all conventional asset classes while experiencing the least risk except for US Bonds. Hence, Global Macro had the best risk-adjusted return of all conventional asset classes (US bonds, US and International stocks and commodities).
Global macro encompasses a vast group of sub-strategies, styles and specialties. In aggregate, global macro has proven to be an important diversifier of returns in institutional investors’ portfolios and as a result, the strategy has attracted much attention since the financial crisis. The strategy is based on tactical asset allocation across global markets, asset classes and financial instruments with no orientation bias. The Fund Manager will have a broad mandate of identifying attractive investment opportunities that will include, but is not limited to seed capital, small capitalization investments, private placements and debt instruments.
The Fund’s objective is to generate superior risk-adjusted investment returns with lower correlation to broad market indices using a global top-down investment approach. This strategy uncovers opportunities in global equities and fixed income securities. AIP focuses on markets where opportunities are significant, although capital is scarce and uses hybrid securities and structured investments in high growth companies in need of capital. The fund manager uses alternative strategies believed to have the potential to provide substantial upside.
For most typical Canadian investors who: