A portfolio manager using a 'global macro' hedge fund strategy would primarily focus on:

Question: A portfolio manager using a 'global macro' hedge fund strategy would primarily focus on:

Answer options:

• Investing in distressed small-cap companies.
• Identifying mispriced individual securities through fundamental analysis. ✅ Making large-scale directional bets on macroeconomic trends, such as interest rates, currencies, or commodity prices.
• Employing high-frequency trading algorithms for short-term gains.

Correct answer: Making large-scale directional bets on macroeconomic trends, such as interest rates, currencies, or commodity prices.

Explanation: Global macro hedge funds seek to profit from broad macroeconomic shifts and policies. They make large-scale directional bets on global economic trends using instruments like futures, options, and currency forwards, rather than focusing on individual security analysis.