Macro hedge funds use tactical asset allocation strategies in an attempt to bet the markets.

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Last year, 184 new macro hedge funds were launched, compared with 203 funds started by traditional stock investors.

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Certainly the mortgage hedge funds turned in far more spectacular returns than any of the huge macro hedge funds.

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The advantage for the hedge funds in the mortgage market lay in the inefficiency of that market and the lack of such fierce competition as existed in the much larger universe of macro hedge funds.

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That made macro funds one of the most popular types of hedge fund.

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The overall Hennessee Macro Index was off 2.1%, faring better than the other hedge fund indices as some funds were positioned conservatively in Treasuries, TIPS and gold.

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