Roundtable: Dramatic increases of activity, interest and investment options in Hard Assets
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“Hard Assets” are experiencing dramatic increases in activity and investor interest. Since the financial crisis, this sector has considerably matured and innovated - investors today probably have more choice than they realise.
Many are receptive to the idea of investing in gold in order to hedge against various types of uncertainties, including financial crises, unintended consequences of QE, fiat currency risk, or purchasing power, among others. For those investors, gold is basically an insurance play. Others on the other hand, believe that passive long exposure to the market, be it in bullion or through an ETF, will likely fail to deliver the returns these investors are looking for. To address those issues, a new breed of managers is using options to construct a strategy that is flat or short premium and able to address both issues of tail risk and capital preservation. Tactical strategies have replaced the “long GSCI and bury your head in the sand” type of commodities investing, also in soft commodities.
And who says hard assets are necessarily illiquid? Eurex's new exchange-listed derivatives offer access to diverse assets such as property futures based on commercial real estate sector indexes, or futures based on European Processing Potatoes.
The Opalesque Hard Assets Roundtable also discussed:
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