Why are big macro names so allergic to being long equities? “Oh no no no. We are serious people here, sir. We do ‘sophisticated’ trading here.”
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Investor preference. Big institutions don’t want their macro managers to be slinging directional beta in stocks, esp not if they are paying 2/20 for net long exposure that they can get for <20 bps elsewhere.
Of course nothing to stop the macro names from putting on risk on trades that are correlated with equities (long credit, fx carry, long oil) and many do. Flies under the radar because allocators only ask about “equity exposure”
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Allocators will also run realised beta calcs... so also easier to hide in tails (upvar-var, CDS basis, MBS vs TBAs etc etc etc) You only blow up once :)
Thanks. Twitter will use this to make your timeline better. UndoUndo
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