Inflation Protection Hedge Fund
R.G. Niederhoffer Launches Inflation Protection Hedge Fund
Many investors are worried about how inflation will affect their portfolios and how they can insulate themselves from inflation. R.G. Niederhoffer is now proposing a solution in the form of an inflation protection hedge fund. The fund aims to limit exposure to inflation by betting long on commodities and short fixed income.
The R.G. Niederhoffer Inflation Protection Program, which started operations in August and gained 4.5% in its first month of trading, combines short-term long-side trading in commodities and short-side trading in fixed income with bi-directional trading in equities and foreign exchange, according to a source close to the fund.
The new vehicle—iHedge—will be long commodities and short fixed income at the end of each trading day to protect against inflation expressed as rising commodity prices or rising interest rates.
The core driver of the fund is the same as that of R.G. Neiderhoffer Capital Management’s 18-year-old Diversified Program, which uses a short-term, quantitative (primarily although not exclusively) contrarian approach to trade multiple asset classes. The fund will hold positions for an average of one to three days, with certain positions—long commodities and short fixed income—held for up to a few weeks, and will offer monthly liquidity. An offshore version will begin trading in September. Source
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