Why many hedge funds invest 70-90% in T-Bonds, and only 10-30% in stocks,Forex, etc.

Discussion in 'Trading' started by crgarcia, Dec 14, 2007.

  1. Usually the 10-30% in the Stock Market, Forex, Currencies, is invested with high leverage, typically futures?

    Why not invest the 100% in outright ETFs, stocks, etc.

    Perhaps a merketing strategy?: You are only risking 10% of your capital?
  2. options (rainbow, asian, CMS), TRS, OTC bets, etc

    Where did you get those numbers?
  3. segv


    Risk of ruin.
  4. BJL


    perhaps liquidity? and higher leverage possible ofcourse.
  5. timbo


    dilution is the solution.

  6. You don't know what they do. Hedge funds are mostly secretive and there is no such data available.
  7. nolajy


    not just t bonds!, t bills, notes etcetera.. these are all
    perfectly acceptable by MOST US futures exchanges for MARGIN.
    Why not put 50 million into bonds, bills, and notes and earn INTEREST while at the same time .. using the bonds bills or notes for 85 to 90 % margin. I.e. 100k= 90K usuable for margin while earning interest. Most brokerages allow one to do this even individuals.. there is a cost of roughly 30 dollars to buy and sell the notes/bills which have values of as little as 10K. .. of which 9000 to 8500 could be used for margin. However, if you incur a margin call you must have cash ready to bring account back up.
    There a little useful knowledge.