Trade finance is a portfolio diversifier
Federated Hermes | 03 August 2026 | 0.25 CE
Dating back to the 13th century, trade finance - loans that provide short-term financing to support the physical flow of goods - is one of the oldest forms of credit. It is estimated that 80% of world trade is dependent on some form of financing. This can be attributed to tighter credit conditions for obtaining alternative sources of capital. But as the demand for trade continues to grow, a complex regulatory environment, coupled with a lack of understanding for the asset class, has contributed to a global shortage of financing.
Due to its ability to provide uncorrelated alpha with limited relia...