What correlation does a Market Defensive FoF generally have with global bonds?

A Market Defensive Fund of Funds (FoF) typically aims to provide stable returns while minimizing risk, focusing on preserving capital in volatile market conditions. This approach often leads to investments that exhibit a positive correlation with global bonds. This positive correlation exists because defensive strategies generally allocate a significant portion of assets to fixed-income securities, such as bonds, which tend to perform well during periods of economic uncertainty or market downturns.

Rising bond prices often coincide with declining equity prices, particularly when investors seek safer assets during market stress. Thus, as a Market Defensive FoF invests in assets that align with this behavior, it reflects a positive correlation with global bonds, especially in environments characterized by low interest rates or economic instability.

The other options reflect different scenarios that do not align with the typical behavior of a Market Defensive FoF in relation to global bonds. Negative correlation would imply that as one asset increases, the other decreases, which is generally not the case for defensive funds and bonds together. No significant correlation suggests that there is no predictable relationship between the two, which also does not capture the inherent stability and safety trades typically inherent in defensive strategies. Variable correlation could suggest a changing relationship based on external factors, but the fundamental nature of a Market Defensive FoF aligns more consistently