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Macro funds can make waves with exposure to global shipping

Commodities are a staple of any diversified investment portfolio, but few investors factor in the cost of sea routes. Can freight rates provide protection against disruptions to global trade?

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    • The shipping market shows little correlation to other traditional asset classes, yet it is volatile and affects virtually every area of the world.
    • The shipping market shows little correlation to other traditional asset classes, yet it is volatile and affects virtually every area of the world. PHOTO: BLOOMBERG

    DeeperDive is a beta AI feature. Refer to full articles for the facts.

    Jonathan Hogg and Karan Jalan

    Published Fri, Nov 1, 2024 · 05:00 PM

    THE announcement of a massive economic stimulus in China in late September has underlined the appeal of commodities for macro investors, with prices ticking higher on everything from rubber to iron ore.

    While commodities are a tried and tested asset class among macro funds, there are other, less crowded ways to take a view on global trends.

    The Baltic Dry Index (BDI), a composite index based on daily freight rates quoted for major sea routes, offers broad exposure to a key part of the commodities value chain but is often overlooked by macro funds.

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