The concept of Value in currency, or the observation that over time developed market currencies typically swing around a long-term 'fair value' level, is key to understanding the arguments in favour of hedging.
Record manages $46.5bn in passive hedging programs and $8.3bn in dynamic hedging (as at 30 December 2016).
Investors who hold international assets are exposed to these swings and hence to volatility in their international asset returns, but this volatility is ultimately unrewarded, as the swings even out over time.
Investors who wish to make their portfolios more efficient from a risk perspective can cheaply and efficiently reduce this volatility through Passive Hedging. Record has considerable experience in designing and implementing passive hedging programs so as to minimise the administrative burdens on the client, and can do so transparently and efficiently.
Investors who wish to be protected against weakening foreign currencies but to continue to capture the benefits of strengthening foreign currencies can do so through Dynamic Hedging. This process exploits Momentum to offer an asymmetric approach to hedging that avoids reliance on forecasting or judgement. All our hedging mandates, whether passive or dynamic, are set up as segregated mandates so each client's requirements can be matched precisely. Please contact us to discuss a bespoke hedging program in more detail.
Client Focus on Hedging
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