Dynamic currency hedging aims to vary the amount of hedging in order to provide better results than a static hedging strategy.
Approach
Dynamic currency hedging is applied to individual currency exposures.
The investment process was developed specifically for hedging purposes, with a special focus on identifying high-risk situations and reacting prudently.
Our systematic methodology combines momentum management and factor identification tools with macro-economic signals based on the portfolio views of our discretionary investment team.
The approach is based on clear and sensible principles, and can be applied to a wide variety of currency pairs including emerging markets.
Our analysts monitor the latest academic research and Foreign Exchange market trends to develop enhancements to our methodology.
Benefits
Currency exposures are monitored and managed.
Operational efficiency is achieved through optimising the execution process and managing settlement and reconciliation with custodian banks and/or prime brokers.
The volatility of returns in portfolios exposed to international assets is reduced.
Best execution is achieved through access to a curated panel of counterparties.
