Bond veteran Said Haidar's clients experienced a dramatic reversal of fate last year as his leveraged short bets on the bond market failed.

According to media reports, Haidar Jupiter Fund, owned by Said Haidar, fell 43.5%, setting the largest annual loss for the fund in over 20 years. And just the previous year, the fund had achieved a record breaking increase of 193%. The significant decline in the fund forced Haidar to make a comprehensive adjustment to its investment portfolio.

The fund's short bets on bonds are the main reason for most of its losses, and Haidar has shifted to long bets on these securities; According to a person familiar with the fund's positioning, Haidar expects major central banks around the world to cut interest rates in the first half of this year.

Japan is the only exception, as the fund continues to make short bets on bonds as Haidar expects the Bank of Japan to have to tighten interest rates. The anonymous source stated that the fund has also withdrawn its short bets on stocks.

Given the further weakening of economic data worldwide, except for Japan, it seems that we are entering a period of loose global monetary policy, "Haidar wrote in a letter to clients last month. This may create a supportive environment for the bond and stock markets, and further weakness in commodities and the US dollar seems possible

Haidar disclosed these adjustments in another message sent to clients last month, helping the fund achieve a 12.4% return in December and reduce its annual loss of up to 50% at the end of November.

A spokesperson for Haidar Capital Management declined to comment.

Macro traders face challenges in 2023 as they debate the speed and extent of interest rate hikes, as well as the timing of potential policy shifts. Especially, the bankruptcy of Silicon Valley Bank dealt a severe blow to hedge funds' interest rate bets in early 2023, impacting global markets. Haidar was one of the biggest losers from the Silicon Valley bank crash, with the fund plummeting 32% in March, setting a record for the largest monthly decline in history.