FYI: The carry factor is the tendency for higher-yielding assets to provide higher returns than lower-yielding assets. A simplified description of the carry trade is the return an investor receives (net of financing) if an asset’s price remains the same.
The classic application is in currencies—the currency carry trade—which calls specifically for going long currencies of countries with the highest interest rates and shorting those with the lowest. Currency carry has been both a well-known and profitable strategy for several decades.
Regards,
Ted
https://www.etf.com/sections/index-investor-corner/swedroe-carry-trade-caveats?nopaging=1
