Investment Insight | Using futures to hedge against interest rate rises

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"At NZ Funds, we have a modern, diversified approach to investing. Diversification is one of the key tenets of finance. It improves risk-adjusted returns over time and is often referred to as the only ‘free lunch’ in financial markets. Put differently, the inability to diversify leads to inferior risk-adjusted returns.

"We take this approach so we can find long-term growth for our clients, wherever it may be in financial markets. But it is also about preserving as much of our clients’ capital as possible, especially when markets in traditional asset classes go through big cyclical shifts. This is exactly what we’re currently witnessing in global bond markets with the rise in interest rates and inflation. We use futures contracts to manage this shift..."

Read the full story about why bond markets are falling and are expected to fall further below.

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