Archive News (2014)


05/12/2014 IPE: Swiss pension funds cautious of 'captive' relationship with local banks

James Wood-Collins, chief executive at Record Currency Management, argues that Swiss pension funds are increasingly alert that they must not be seen as captive clients of the nation’s largest banks. This is a result of a heightened awareness of the counterparty risk inherent in employing a custodian bank to protect against currency fluctuations and has led to an increase in assets under management at Record.

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28/11/2014 Bloomberg: The trader’s grin that tells you volatility is back: currencies

A jump in volatility from July’s record lows has given currency traders a greater opportunity to make money and boosted an index of foreign-exchange returns by 2.1 percent this year. Currency volatility has picked up on speculation that the Federal Reserve is preparing to raise interest rates and on the news that OPEC refused to cut output causing oil prices to drop. James Wood-Collins, CEO of Record of Currency Management, notes that all the firm’s currency investment strategies made money in the six months to Sept 30. as currency volatility increased and suggests that this is a result of the improved outlook for divergent monetary policy.

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25/11/2014 Euromoney: decline of currency hedge funds

It has been a tough few years for currency hedge funds. Several high-profile currency managers have closed down since the financial crisis as a result of poor performance; however, some are now predicting a return to form for FX strategies. James Wood-Collins, CEO of Record Currency Management, says that the expected divergence of central-bank policy in 2015 will help FX strategies such as carry. He adds that he favours the diversification of currency strategies as the underlying behaviours of the strategies are rewarded in different environments.

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24/11/2014 Participation at FX Week Europe

Javier Corominas, Head of Economic Research and FX Strategy at Record, will be involved in an authors' roundtable discussion about the role of currency in an institutional portfolio at FX Week Europe on Wednesday 26th November. Javier contributed a chapter on investing in Emerging Market Currencies to the book 'The Role of Currency in Institutional Portfolios' edited by Momtchil Pojarliev and Richard Levich, due to be released in 2015. 


03/11/2014 Financial Times Fund Management: Eurozone mirroring Japan

The economic parallels between the Eurozone and Japan appear to be increasing. Both areas are struggling with ageing populations, high levels of public debt and the spectre of deflation. Javier Corominas, head of economic research at Record Currency Management, is concerned that “the Eurozone’s debt burden is approaching similar levels to that of Japan in terms of sustainability” and that the Eurozone is approaching a persistent low inflation environment with inflation expectations suggesting that inflation will remain low in the Eurozone.

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29/10/2014 Euromoney: High dollar-equity correlation

Over recent months, the US dollar has become highly correlated with equities evoking memories of the dotcom boom when the two assets rose together for an extended period. The dollar and equity markets are usually negatively correlated as demand for the dollar rises during periods of risk aversion while demand for equities increases alongside investors’ risk appetite. James Wood-Collins, CEO at Record Currency Management, suggests that while there have been more marked correlations between currencies and other assets since 2008, it is impossible to say whether these will be sustained going forward.

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07/10/2014 Financial Times: Active currency funds are back

Active currency funds experienced a significant fall out of favour as a consequence of the global financial crisis. Back in March of 2008, Record Currency Management managed over $29bn of active currency products. As of June 30 of this year however, that subsequent reversal in active currency fund interest can be noted through the $2.5bn Record currently manages. 

James Wood-Collins, CEO of Record, notes that despite the adverse conditions of 09/10, there has recently been a resurgence of interest in its active currency strategies.

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06/10/2014 Financial Times: Bitcoin ready to take over

The prominence of Bitcoin has led many currency professionals to question whether the possibility exists, that Bitcoin could pose a significant threat to the traditional fiat currency system. Such a move would reformulate the currency landscape - but James Wood-Collins, CEO of Record Currency Management, fundamentally disagrees with the prospect of Bitcoin usurping established currencies by pointing to the three classic functions of money.

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01/09/2014 International Financing Review – Emerging Market Investments

After the emerging market sell-offs that occurred in 2013, emerging market sentiment has improved with many investors bullish on their prospects. However, investors need to remain aware of individual countries’ idiosyncratic risks rather than treating emerging markets as a single entity. James Wood-Collins, CEO of Record Currency Management, argues that it is critical to have a discretionary override process in emerging market investments as one has to pay close attention to the the ongoing macro, geo-political and financial situations within individual countries. He also suggests that currencies offer the best opportunity to generate returns from emerging markets as there is greater flexibility and liquidity in the FX market and it is generally cheaper to invest in.  

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03/07/2014 Profit and Loss: The change in Scandinavian FX

New changes within the Scandinavian FX markets are impacting various sections of the buy side. Although Scandinavian currencies are perceived by many currency managers as being key constituents of the G10 currencies, the Swedish krona, Norwegian krone and Danish krone are not in the global top ten traded currencies.

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01/07/2014 Camradata: has the demise of currency management been overplayed?

There appears to be a general consensus that currency management has disappeared forever, evidenced by the many currency specialists that have folded under the pressures of remaining competitive within currency markets. FX Concepts, once the world's biggest currency hedge fund, filed for bankruptcy last year. Despite this, James Wood-Collins, CEO of Record Currency Management, one of the most renowned names in global currency management, feels that reports of currency markets' imminent death are wide of the mark.

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17/06/2014 Funds Europe: Record Currency Management sees interest in carry trade

Investors are interested once in the carry trade once again as central bank policies diverge. Record Currency Management signed up its first significant external investment in the Record FTSE FRB10 Index Fund stating that it was the culmination of interest in the carry trade. Neil Record, chairman of Record, says, "Interest in return-seeking opportunities, particularly carry opportunities, has begun to re-emerge, driven by growing divergence of central banks' policies."


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01/05/2014 Euromoney: seeking best execution

James Wood-Collins, CEO of Record Currency Management, discusses the expansion of the FX market to daily trading volumes of $5.3 trillion, and the challenges now faced within the market as a consequence of stagnant dealer participation.

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01/05/2014 Portfolio Institutional: a requirement for systematic currency programs

Many institutional investors had invested in quantitative, alpha generating FX models which relied on leverage and gearing, and took a beating in the financial crisis. Recently, however, consultants and investors have recognised that there are sustainable returns to be generated in currency markets using a more systematic, index based approach. These strategies can offer an appealing amount of return per unit of risk and diversification.

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07/04/2014 Financial Times: Forex lawsuits filed

The global FX industry has recently come under fire as regulators try to find out about currency benchmark manipulation. Many larger institutions have filed lawsuits against the implicated banks, as they have been unprepared to wait for investigations to cease. However, there are some doubts about who easily investors may prove that they have suffered financial losses.

James Wood-Collins, CEO of Record Currency Management, commented that proving such allegations is impossible without knowing what the rate would have been, adding that Record's clients were not unduly worried.

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01/04/2014 FX-MM: Currencies show their class

For years the debate has raged as to whether FX can be truly considered an asset class, but wherever you stand on the issue, there may be reasons to start looking at currency investing. Broadly speaking currency investing can be split into three main trading styles: momentum, valuation and carry. The prospect of divergence in central bank monetary policy has paved the way for investors to exploit traditional carry strategies as well as momentum approaches. James Wood-Collins believes that this has all come at a good time for the currency management industry, "Coming back to look at FX as an asset class is quite timely because a lot of people take the view that for a number of strategies,  particularly carry, the tactical background is a lot more supportive".

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31/03/2014 FX Week: Buy side prefers voice trading

Buy-side firms still prefer voice trading to electronic trading for primary price discovery and bespoke trading strategies, and find relationship-based voice trading a "better experience", despite electronic trading gaining significant ground over the past year. In the wake of allegations relating to the WM/Reuters benchmark, the push towards electronic trading has accelerated as banks argue that e-trading creates a clear audit trail and removes the human element from trading. However, James Wood-Collins, CEO of Record Currency management, argues that electronic trading is not a "universal panacea to best execution from a client's perspective", as relationship-based deals often yield better prices and certainty of execution.

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31/03/2014 FX Week - Buy side steps in on delegated reporting

Top-tier banks are losing interest in offering delegated trade reporting, just weeks after reporting requirements came into force under the European Market Infrastructure Regulation (Emir), and some buy-side firms are now offering the service themselves. While banks may be having second thoughts on delegating reporting, some currency managers believe it makes more sense for them to offer the service directly to the end investor. "In theory, our clients could delegate this to the banks… in practice we have the day-to-day client relationship, so clients are more comfortable with us undertaking this on their behalf, as part of the service for which they're already paying us," says James Wood-Collins, chief executive of Record Currency Management.

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26/03/2014 Markets Media: What's next for FX

74% of the total volume of FX executed last year was traded using an electronic systems, up 3% on 2012. James Wood-Collins commented that it was crucial to maintain phone dealing infrastructure to ensure the best pricing and liquidity regardless of the prevailing conditions.

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25/03/2014 FX Week: Managers see increased interest in FX

Currency managers are attracting more interest from clients as differentials grow between developed-world economies. Divergence in central bank policy is beginning to strike a chord with investors, who are beginning to make enquiries into currency investment once more. James Wood Collins, CEO of Record Currency Management commented that there was increased interest in hedging products in the US, driven by the desire to reduce portfolio risks.

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18/03/2014 Pensions & Investments: US considers dynamic hedging

The demand for active currency hedging strategies is amongst institutional investors is growing, and, according to asset managers, investors in the US seem keen to participate. Continued tapering of the Fed's quantitative easing policy and divergent growth are making for less predictable risk and return patterns from currency to currency, prompting institutions to reconsider their passive approaches to currency. James Wood-Collins, CEO of Record Currency Management, commented that, due in part to increased overseas allocations since the last dollar bull market, Record was seeing increased interest in from the US.

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17/03/2014 FX Week: Light at the end of the tunnel

Asset managers are seeing a pick-up in interest in currency as an asset class after years when it has not appealed due to the low-rate environment. James Wood-Collins, chief executive at Record Currency Management, notes that Record has received more enquiries for both hedging and currency-for-return strategies in the past few months. He also observes renewed interest in the carry trade as the Fed diverges from the policies of the Bank of Japan and the European Central Bank.

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17/03/2014 Markets Media: FX – A large liquid market

Currency markets are typified by their size and liquidity, and as the market changes to incorporate high-frequency traders as well as private individuals, the transaction costs continue to reduce. James Wood-Collins, CEO of Record Currency Management, commented that the FX markets were fit for purpose for their users, particularly with regards to spreads, and that Record targeted transaction cost savings well above that of traditional market benchmarks.

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03/03/2014 Pensions & Investments: diversified strategies reap rewards

Publicly traded asset management firms that diversified their business models announced 2013 profit margins that typically either equalled or exceeded their pre-crisis levels. James Wood-Collins, CEO of Record Currency Management, notes that when Record was initially listed in 2007, active currency strategies accounted for about 50% of total assets under management.  Now, as a result of changes in marketappetite following the financial crisis, active currency strategies account for only 5% of AUM with  hedging accounting for the other 95% of AUM.

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03/03/2014 Financial Times: accessible FX trading

In a letter to the Financial Times, Javier Corominas responds to an article by Jonathan Eley ("Why would anyone trade forex?") and argues that currency investment is accessible to professional and retail investors alike. He goeson to explain that the carry trade is a risk premium to be exploited and that low transaction costs enable retail investors.

For the rest of this letter, click here

01/03/2014 Profit & Loss: how to define Best Execution?

As the probe into the WM/Reuters Fix continues to dominate headlines, many buy side participants are asking what defines best execution and whether the WMR Fix is helpful in achieving it? James Wood-Collins, CEO of Record Currency Management, believes that best execution is enigmatic and that a trader's obligation should be to achieve the best result for the client, whether or not that uses the WMR fixing rate.

26/02/2014 Financial Times: UK boosted by sales of property to foreign investors

Trade appears to be the weak underbelly of the UK economy. The current account deficit has been around 4 per cent of national income for the past two years and net trade contributed just 0.1 percentage points to the 1.8% increase in GDP in 2013. However, these figures do not tell the full story. In national accounting conventions the sale of property, which is a significant part of the UK economy, to foreigners does not count as an export but rather as foreign direct investment.

Neil Record, chairman of Record Currency Management, argues that the sale of property is a British export success and should not be viewed as the sale of the family jewels, given the continued construction. His calculations suggest that the sale of property to overseas investors could account for 1% of GDP.

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25/02/2014 Reuters: possible rate hike causes pound to rise

The sterling gained further against the dollar after Bank of England policymaker Ian McCafferty suggested market expectations of a rate hike in spring next year were realistic. The pound also continues to hold its strength against the euro as low euro zone inflation may prompt the ECB into further easing. This has benefitted British investors who hedge their overseas exposure. James Wood-Collins, chief executive officer at Record Currency Management, stated that the returns for investors implementing dynamic hedging have improved as a result of the sterling's performance.  

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12/02/2014 FX-MM: Sixty seconds with…

James Wood-Collins recently featured in FX-MM's sixty seconds and discussed reasons for optimism in the currency industry, Record's unique approach to currency management and his interests outside of finance. Please click here to read the interview.  

10/02/2014 FX Week: Spreads compression benefits buy side

Currency trading costs have declined for two consecutive quarters for asset management firms, as counterparties narrow their bid/ask spreads in the most traded  pairs to increase market share in competitive conditions. James Wood-Collins, chief executive of Record Currency Management commented that Record records data from a variety of sources in the course of trading and has seen spreads narrow for two quarters in a row (Q3/4 2013), most evidently within the G10.

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