US retail funds continue to ditch inflation hedges
Counterparty Radar: Aggregate notional drops 27% in Q1 as Pimco unwinds more swaps
US mutual fund and exchange-traded fund managers further reduced their inflation hedges in the first quarter, as the rate of price increases for goods and services continued to subside across most advanced economies.
The combined notional volume of the retail fund sector’s inflation swap positions stood at approximately $7.1 billion on March 31, the lowest in 13 quarters. This is down $2.5 billion, or 27%, compared with the final quarter of 2022.
Positions denominated in sterling saw the
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