Packaging Exposure to China

Risks usually come in a bundle. If you want exposure to a particular factor risk – or you want to hedge that particular risk and concentrate your exposure onto other factor risks – you may have to find a way to create that exposure synthetically. Investment managers are constantly looking for ways to do this. The Financial Times had a nice piece on getting exposure to China risk. Hedge fund manager Hugh Hendry seems to think that a portfolio of Japanese corporate bonds has a big China exposure.

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