Ivo, very well articulated wire. This has been a conundrum for commodity traders forever. While studying the effect of funds on markets, one set of fund managers seem to allocate a certain portion of their AUM (say 5%) for food inflation. Hedge it with a basket of grains/oilseeds/softs...they assume they have hedged their portfolio, expecting rest of the portfolio - be it commodities, hybrid or theme based - to perform as per their expectation. It is a better justification to investors too, whether the portfolio performs well (which case heroes), or badly (they have something to hang onto)...
Is there a reason why Iron ore is not in the 2023 breakdown?
Is there a reason why Iron ore is not in the 2023 breakdown?
Ivo, very well articulated wire. This has been a conundrum for commodity traders forever. While studying the effect of funds on markets, one set of fund managers seem to allocate a certain portion of their AUM (say 5%) for food inflation. Hedge it with a basket of grains/oilseeds/softs...they assume they have hedged their portfolio, expecting rest of the portfolio - be it commodities, hybrid or theme based - to perform as per their expectation. It is a better justification to investors too, whether the portfolio performs well (which case heroes), or badly (they have something to hang onto)...