What do hedge funds buy to protect against recession?

Discussions about the recession, its threats and ways to protect itself from it are increasingly filled with foreign media. Investors are considering how best to protect yourself from the recession. What investment opportunities do hedge funds pursue and how do they invest their finances?

Hedge funds and recession

Analysts and economists are increasingly talking about threat of recession in the case of the United States American. According to some, it has already happened, according to others it is only a matter of a few months. Still on last week’s investment Morningstar conference several fund managers stated that do not expect a significant economic slowdown. As they noted, their goal is to focus on investing in a technology sector that has been decimated by the epidemic and geopolitical situation. Nothing declines forever and pandemics and wars have their beginnings and ends. So what companies and assets do managers plan to target?

David Giroux in a recent interview in Morningstar shared his conclusions about where to invest in the near future. According to Giroux, they will focus on areas of technology with more attractive infrastructure and stronger cash flows that generate revenue three to four times faster than the market.

The companies that fall under this concept therefore include Apple (AAPL), Microsoft (MSFT) a Nvidia (NVDA). In addition, the company Amazon (AMZN) trades for the appreciation of its cloud business, offering retail and advertising business essentially free of charge. These are stocks that are traded under Nasdaq Stock Exchange which trades shares of technology companies.

Cyber ​​security and cloud systems

Even in times of declines and recessions, there are segments that are growing, respectively. are less unprofitable than the rest of the market. Kate Moore from the US multinational investment management giant BlackRock (BLK) votes cyber security, cloud ecosystems and agricultural complex companies due to the war in Ukraine. 

As we can see from the examples above, investors and funds are still looking for areas that are less affected by the crisis and which provide greater potential for the appreciation of their finances. Fund managers who work with trillions of dollars are not panicking yet, but rather looking for new ones opportunities for time. Imitating their actions and decisions can lead to investment protection. Finally, it should be added that cryptocurrencies have not been included in this category, as most funds and investors still consider the sector to be high-risk and speculative, which, unfortunately, has been the subject of several recent events.