NZ firm debuts high-risk inflation hedge fund

Alibaba News Channel – Hedge fund firm 36 South said on Monday it had launched a "high risk/high return" fund designed to protect investors’ portfolios against a surge in global inflation. The Excelsior fund will target returns of five times the rate of inflation in the G5 group of economies, if that inflation rate exceeds 5 percent, by buying long-dated out-of-the-money options across assets such as equities, commodities, currencies and interest rates, the firm said in a statement.

However, if the rate of inflation stays below 5 percent then investors could lose all their money, a spokesman said.

"Inflation is the single greatest risk facing the world economy at present," said 36 South director and founder Jerry Haworth.

"Whilst the prevailing view is that a sustained period of significant global inflation is unlikely, investors need to be attuned to this risk and the devastating effect it will have on their portfolio should this scenario come to pass."

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