Rooted in over a 25-year history and evolution of global asset allocation, First Quadrant’s macro solutions are designed to tactically and dynamically allocate risk between different assets, factors and ideas to take advantage of opportunities when there is the greatest probability for gains. Our macro strategies invest globally in multiple independent categories that span a wide variety of assets and strategies, including stocks, bonds, currencies, commodities, options, managed futures, risk factors and risk premia.
First Quadrant’s macro-oriented currency strategy makes diversified investments in developed market currencies using the most liquid instruments in the world. The process is fundamentally based and exploits the drivers of relative value of currency markets while taking advantage of influences of both short-term and long-term capital flows, trade flows and supply/demand pressures. The process is designed to deliver positive returns over a full market cycle, provide non-correlation to other investments, and deliver diversification when needed most.
Commodities are a truly unique asset class. In a long-only context, they are notable for their diversifying effect on more conventional portfolios of stocks and bonds, as well as for hedging unexpected inflation and providing exposure to global growth. They also attract varied market participants, from financial speculators to informed commercial traders, creating many opportunities for persistent market inefficiencies. Using a diverse set of fundamental drivers, First Quadrant’s approach to commodities seeks to capture these inefficiencies systematically in liquid futures markets using a long/short or long-biased framework, depending on client goals.
With a long history of implementing volatility-based solutions to help meet our clients’ objectives, First Quadrant employs unique techniques aimed at controlling and exploiting the characteristics of volatility. Our volatility-based solutions are non-directional and designed to exploit structural characteristics of options pricing and relative value opportunities in a fully hedged fashion. The process seeks consistent returns by combining a stringent investment process with tight risk controls and can be flexibly implemented as a low volatility overlay or higher volatility alpha source.
Please contact us to see how our diversifying return solutions can help meet your specific needs.