CalPERS’ Untimely Tail-Hedge Unwind: The Inside Story

After “cutting its crash-hedging program as part of a cost-curtailment effort and because of a lack of understanding of how tail hedges work,” the California Public Employees’ Retirement System (CalPERS) missed a payout of more than $1 billion when markets crashed in March. This according to a recent article in Institutional Investor. Last October, facing mounting pressure from investors worried about the bull market ending, CalPERS decided to curtail the costly hedging initiative which the… Read More

Copper Better Hedge than Gold

While gold has been the popular inflation hedge over the past ten years, copper was a better bet according to a recent Bloomberg article. “While data show that broad community indexes provided the best bang for the buck during periods of rising costs in the U.S., the red metal stands out. According to the article, for every 1% annual increase in the consumer price index since 1992, copper rose by nearly 18% compared to 5.2%… Read More