07.28.2011
By Terry Flanagan

Institutions

It’s a time of opportunities for global macro fund managers, who benefit from global economic turmoil and volatility.
In today’s volatile markets, investors pine for funds with investment strategies that can bear all kinds of market events. For some, that might be the top-down, somewhat quant world of global macro.

“From 30,000 feet, global macro is a very attractive strategy because of the ‘go anywhere’ mandate. They can capitalize on any kind of moves in the global markets,” said Jon Sundt, chief executive and president of Altegris Mutual Funds.
Altegris is launching a “best of breed” mutual fund platform, which entails representation from various global macro hedge funds.

“We’ve selected dozens of managers and assembled what we believe to be a lineup of some the best macro managers in one fund. Originally, these were reserved for institutions due to high minimums, but we’ve put them into a single fund, via our open architecture platform,” Sundt told Markets Media.
The convergence of retail and institutional investing is a trend becoming more commonplace to investment managers. Critics of the movement to make institutional products retail-oriented highlight the knowledge gaps of fund distributors—the financial advisors.

“Education is a big part of our role, “said Sundt. “We’ve started the Altegris Academy Research Series to help financial advisors understand global macro and managed futures. More financial advisors are becoming up to speed quicker, because they have to.”

Understanding the plays and investments of a global macro manager are paramount, given the “go anywhere” mandate.

Typically, global macro strategies will long/short interest rates, equities, commodities and currencies. However, more exotic plays are at a global macro manager’s fingertips, including profiting from inflation, deflation, and the Eurozone’s containment and relation to the U.S. recovery—turmoil which might spell disaster for other managers.
“There is such a low correlation of global macro strategies to equities, currently at about .04 percent,” said Sundt. “The total return for global macro has been over 100 percent in the last decade.”
Thus far, 2011 has been slow for global macro, stated Sundt. Slowness can be attributed to the “risk-on, risk off” environment of the global markets. “Is the U.S. recovering, or is it not; is Greece going to default, or is it not,” he said. “Longer term volatility can be good, but global macro managers need things to play out.”

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