Its a good article and I lean more to 2 than 1. Mgmt teams nowadays are hyper sensitive to the external environment. However it is impractical to hedge out the curve. Many products are illiquid after a few months. Hedging the benchmark means taking on basis risk. Physical hedges maybe but that too is complicated in size longer dated.
Its a good article and I lean more to 2 than 1. Mgmt teams nowadays are hyper sensitive to the external environment. However it is impractical to hedge out the curve. Many products are illiquid after a few months. Hedging the benchmark means taking on basis risk. Physical hedges maybe but that too is complicated in size longer dated.
Its a good article and I lean more to 2 than 1. Mgmt teams nowadays are hyper sensitive to the external environment. However it is impractical to hedge out the curve. Many products are illiquid after a few months. Hedging the benchmark means taking on basis risk. Physical hedges maybe but that too is complicated in size longer dated.