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Asset classes

Active Currency Strategies

Currency markets are among the most liquid and inefficient markets in the world. This spells opportunity, whether you wish to reduce risk or enhance returns by finding new return sources.


• The inefficiency of currency markets makes them ideal for active investors

• Our approach covers the G10 nations and combines quantitative and qualitative inputs

• The strategies we provide include active currency portfolios and currency overlays.

 Our active currency team has 14 years of collective investment experience.

A complementary asset class

You may be finding it difficult to achieve the investment returns you need using traditional investment strategies. Increased market volatility in recent years has led to returns from many asset classes being more correlated than usual. At the same time, liquidity risks have risen during the past few years, especially during bouts of market turbulence. Given this, we believe that investors should seriously consider the benefits of incorporating active currency strategies in their portfolios.

Rich vein of trading ideas

Active currency management can provide significant diversification benefits with less liquidity risk than any other asset class. Currency markets are the largest and most liquid in the world, with daily turnover of around $4 trillion (Bank of International Settlements, 2010).

However, many participants in the markets, such as central banks, are not motivated by profit. This creates inefficiencies that regularly throw up investment opportunities.

Blended approach

Exchange rates are influenced by many factors, including monetary policy, economic data releases and capital flows. Successful currency management consequently calls for a wide variety of well-organised quantitative and qualitative inputs.

Our blended investment style combines quantitative tools with qualitative decisions in a coherent framework that is designed to deliver consistent risk-adjusted returns in a highly structured and disciplined way.

 

* Data as at 30 September 2011.