What are the four macro strategies?

1. customer excellence 2. operational excellence 3. product excellence 4. locational excellence

Prasanna | 446 days ago

A global macro strategy is a hedge fund or mutual fund strategy that bases its holdings primarily on the overall economic and political views of various countries or their macroeconomic principles. Holdings may include long and short positions in various equity, fixed income, currency, commodities, and futures markets.

For example, if a manager believes the United States is headed into a recession, he may short sell stocks and futures contracts on major U.S. indices or the U.S. dollar. He may also see a big opportunity for growth in Singapore, taking long positions in that country's assets.

Global macro funds are normally actively managed, which means they have a higher investment threshold and higher fees.

Global macro funds build portfolios around predictions and projections of large-scale events on the country-wide, continental, and global scale, implementing opportunistic investment strategies to capitalize on macroeconomic and geopolitical trends. Global macro strategists make forecasts and analyze trends involving factors such as:

Interest rates
Politics
Domestic and foreign policies
International trade
Currency exchange rates
Other factors

Global macro funds are considered among the least-restricted funds as they generally place any type of trade they choose using almost any type of security.

Global macro funds generally use a combination of currency-based, interest rate-based, and stock index-based trading strategies. Within the context of currency strategies, the funds typically seek opportunities based on the relative strength of one currency to another. Funds monitor and project economic and monetary policies around the world, and make highly leveraged currency trades using futures, forwards, options, and spot transactions.

Interest rate strategies usually invest in sovereign debt, making directional bets as well as relative value trades. A fund manager generally concentrates on monetary policy, its economy, and political situation. Some of the vehicles they may choose in this strategy include U.S. Treasury and European debt instruments. They may also invest in government debt from other developed and emerging countries.

Stock or equity index trading under a global macro strategy analyzes the equity or commodity index of a specific country using futures, options, and exchange-traded funds (ETFs). Fund managers generally try to create portfolios that outperform the index during lower interest rate environments. They mainly focus on liquid assets that can be easily traded when there is uncertainty. These assets only come with market risks, which are expected. This means there are no other risks—liquidity or credit risks—involved. Certain global macro funds employ strategies focused on only emerging market countries.

There are a variety of generalized global macro fund types that exist, most of which aim to profit on systemic and market risk factors. Discretionary global macro funds construct portfolios at the asset-class level based on a top-level view of the global markets. This type of global macro fund is considered the most flexible as managers can go long or short with any type of asset anywhere in the world.

Commodity trading advisor (CTA) global macro funds use various investment products, But rather than creating portfolios based on top-level views, these funds use price-based and trend-following algorithms to help construct portfolios and execute the fund's trades.

Systematic global macro funds use fundamental analysis to build portfolios and execute trades using algorithms. This type of fund is essentially a hybrid of discretionary global macro and CTA funds.

A global macro strategy bases its holdings on the economics and politics of various countries or their macroeconomic principles.
This strategy is used primarily by hedge funds and mutual funds.
The three types of global macro strategies are currency-related, interest rate-related, and stock or equity index-related.
Fund types include discretionary global macro funds, commodity trading advisor global macro funds, and systemic global macro funds.

These funds are generally actively managed. As noted above, they try to profit off broad changes that result from both political and economic factors. They can be fairly diversified, offering exposure to different assets and instruments. Because they are actively managed, investors can expect higher investment thresholds and higher fees associated with these funds.

Institutional Investor announced its Hedge Fund Industry Award nominees for 2019, which included a few global macro funds. New York-based Element Capital Management, the report cited, jumped 17.3% since 2018. Under Jeffrey Talpins, the fund uses a multi-process investment approach by combining macro fundamental, systematic, and relative value analysis.

As of November 2018, Element Capital Management had $55.88 billion in assets under management.

Bridgewater Assets is another name cited by the publication, posting a jump of 14.6% in its Pure Alpha Strategy. The firm reported $124.7 billion in assets under management as of 2018.

Four Strategies: Firms consider pursing various market segments as part of their overallgrowth strategies1.Market Penetration Strategy:A growth strategy that employs the existing marketing mixand focuses the firm’s efforts on existing customers2.Market Development Strategy:A growth strategy that employees the existing marketingoffering to reach new market segments, whether international or domestic3.Product Development Strategy:A growth strategy that offers a new product or service to afirms current target market4. Diversification Strategy:A growth strategy whereby a firm introduces a new product orservice to a market segments that it does not currently servea.Related Diversification:A growth strategy whereby the current target marketand/or marketing mix shares something in common with the new opportunityb.Unrelated Diversification:A growth strategy whereby a new business lacks anycommon elements with the present businessFour Macro (overarching) Strategies:1. Customer Excellence: focuses on a value-based strategy for retaining loyal customersand excellent customer service2. Operational excellence: Achieved through efficient operation and excellent supply chain,strong relationship with suppliers, and human’s resource management*Firms with strong relations gain exclusive rights to sell merchandise inparticular regions, obtain special terms of purchase that aren’t available to competitors orreceivepopular merchandise that may be in short supply3. Product Excellence: Having products with high-perceived value and effective brandingand positioning.4. Locational Excellence: Having a good physical location and Internet presence.The Marketing Plan (five steps):1. Planning Phasemarketing executives in conjunction with other top managers:a. Define the mission/vision of the businessb. Evaluate the situation by assessing how various players, both in and outsidethe organization, affect the firms potential for success2. Implementation Phase:process when marketing managers:a. Identify and evaluate different opportunities by engaging in STPb. Implement the marking mix using the 4P’s3. Control Phase:entails evaluating the performance of the marketing strategy usingmarketing metrics and taking any necessary corrective stepsRelative Market Share:1. Stars: (upper left) occur in high-growth markets and are high market share productsrequiring a heavy resource investment and new product facilities to fuel rapid growth2. Cash Cows (lower left) are in low growth markets but are high market share productshave excess resources due to previous heavy investment to develop3. Question Marks (upper right) appear in high-growth markets but have relatively lowmarket sharesmost managerially intensive products in that they require a lot of resources