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Conscious Currency™
A new approach to understanding currency exposure



November 2010

Ian Toner


Ian Toner, CFA
Head of Currency Implementation





Most institutional investors have significant exposure to international assets: few institutional investors hedge the currency exposure that this entails. While institutional investors typically believe that this currency exposure has little long-term effect, the reality is that it can be seen as a significant concentrated bet on the behavior of their domestic currency. In fact, for many institutional investors, this single bet on the relative strength of their domestic currency can be seen as the single largest unmanaged bet in their portfolio. In these papers, Russell proposes a different way to look at the portfolio issues posed by currency risk.


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For more information about our research, please contact David or Gerry:

   

West Coast

David Rothenberg
David Rothenberg
Managing Director
866-926-5934

East Coast

Gerry Lillis
Gerry Lillis
Director
866-459-4128






Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Nothing contained in this material is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. The general information contained in this publication should not be acted upon without obtaining specific legal, tax, and investment advice from a licensed professional.

Russell Investment Group is a Washington, USA corporation, which operates through subsidiaries worldwide, including Russell Investments, and is a subsidiary of The Northwestern Mutual Life Insurance Company.

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