CFA Webinar
In today's investment environment, investors are looking worldwide for opportunities to diversify and increase their returns. However, currency management is often overlooked, even though it plays a key role in optimising portfolio returns and reducing volatility. In particular, european institutional investors often hedge their foreign currency positions completely in order to comply with regulatory requirements, but thereby forego potential return opportunities. We present a novel portfolio management approach that combines active currency risk management with a clearly defined risk budget. This approach allows to selectively unwind the currency hedge in order to take advantage of attractive return opportunities without exceeding predefined risk limits.
