To achieve maximum returns consistent with an investor's
appetite for risk, the correct identification and estimation of all
relevant risk factors in a portfolio
are necessary. This paper identifies the
role of foreign currency as an important risk factor
from an international investor's point of view.
International Investment Portfolios - Protecting Currency
This paper illustrates the Dollar weakness in a historical and
"fair value" context and the extent to which it has enhanced
foreign asset returns. It then outlines how a reversal would
affect these returns, and how hedging can mitigate this.
The Rationale for Currency Hedging
This note sets out some of the reasons why a UK institutional
investor might wish to hedge the currency exposure inherent in the
international components of its investment portfolio.
Cash Flow Management in Currency Gedging Mandates
This note considers various approaches to managing cash flows,
and in particular negative cash flows or cash outflows, for
institutional investors undertaking currency hedging of
international assets through forward contracts.
Disentangling Returns from Hedged International Equities
The purpose of this note is to describe the
various sources of return that accrue to a USD-based investor in
international equities, including any hedging returns. We
also comment on the importance of being able to distinguish between
these returns in reporting systems.