We have a range of strategies that are intended to exploit the long-term appreciation potential of emerging market currencies. These strategies can be implemented through currency forward contract positions, or more bespoke mandates. Opportunities also exist for optimising existing emerging market currency exposure in underlying equity and bond portfolios.
The Record Emerging Market Currency Strategy provides an easily accessible route for institutional investors to gain exposure to a broad range of liquid Emerging Market currencies against a diversified group of developed market currencies. Record has been involved in Emerging Market currencies on behalf of its clients since 1996.
Why Emerging Market currencies?
A significant proportion of returns from traditional Emerging Market equity and bond markets are in fact from currency appreciation rather than the underlying markets.
But currency markets have greater liquidity, much cheaper transaction costs and simpler execution than equities and bonds.
The drivers behind Emerging Market currency appreciation are different to those of the underlying equity and bond markets.
The objective of the Strategy is to generate excess returns through the expectation that Emerging Market currencies will appreciate on a real (after inflation) basis relative to developed market currencies due to the superior growth rate in Emerging economies. The Emerging currencies are paired with developed market currencies in order to diversify the source of return and lower the volatility of the overall portfolio. The qualifying Emerging currencies are chosen for their growth potential and/or yield characteristics. In order to qualify for inclusion in the Fund all of the Emerging Market currencies are reviewed against specific criteria on an ongoing basis.
Download: Emerging Markets Fund Dealing Calendar 2017