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A 'Check the Runner' Moment for Global Macro Funds

Did Brexit catch these go-anywhere alternative funds leaning the wrong way?

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We won’t know for some time whether the immediate post-Brexit market volatility augurs a longer-term global market decline or just a short-term bout of uncertainty. (Although, as of this writing, the markets had rebounded firmly.) At a minimum, however, for investors in global macro funds, the two days of post-Brexit market volatility served as a “check the runner” moment.

In baseball, when a player reaches first base, the pitcher will adjust his pitching routine to incorporate various “checks” on the runner, which may include altering his windup, looking over at the runner, and tossing the ball to the first baseman. Through these actions, the pitcher can gauge the runner’s intentions and perhaps catch the runner leaning the wrong way--which, with a good pickoff move, can result in an out.

Josh Charlson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.