The economic costs of the current conflict in Ukraine may pale into insignificance in comparison to the human suffering, but they are not irrelevant to markets. The bottom line is of course that wars make society poorer, as does conflict in general, natural disasters, or catastrophic errors.
It is well known that issues of fees, complexity and illiquidity are reasons often used to dismiss investment portfolios that include hedge fund strategies.
The short answer is: it depends on the hedge fund you are looking at, and how they’re implemented to a wider KiwiSaver portfolio.
During the late 1980s, at the height of the Bubble Economy, and at a time during which seemingly everyone wanted to emulate the Japanese economic model, we were lucky enough to have high level access to the Bank of Japan.
There has been a marked inflation of money balances in the USA and of course elsewhere within the global economy over the last 18 months that has led to a generalized inflation of household balance sheets – nominal expenditure, financial asset prices, and property prices have each inflated – in many cases proportionately.
It goes without saying that the Covid-19 Pandemic has caused – and is still causing – disruptions to people’s ability to spend and companies’ ability to produce goods and to supply services. Moreover, the Pandemic looks set to disrupt the global economy for at least another six months and most likely somewhat longer.