Hedge equity risk with credit options, suggests Triple-I

Sovereign wealth funds and other investors keen to hedge global equities exposures may find traditional equities derivatives too expensive. One salesman at a US-based investment adviser argues they should look to fixed income, particularly to US corporate bonds, as a substitute hedge for stocks. This is not the usual approach, but one US pension fund has recently undertaken such a trade, says Stephen Jimenez, head of Asia-Pacific investor relations at Boca Raton, Florida-based III Ass…