Conscious Currency™
A new approach to currency exposure
Most currency exposure today comes from unhedged international investments, although some investors also have allocations to active currency strategies. Our new research uses the latest developments in investment and index construction research to provide investors with a novel and powerful, methodology for understanding and managing currency risk. We describe this approach as Conscious Currency™.
Traditionally, the amount and nature of currency exposure has tended to be an outcome of the investment process. In contrast, Conscious Currency™ suggests that investors should measure and model currency as a separate exposure set, based on the behavior of the currency markets. Investors need not believe that currency is an asset class, nor that it has a positive long term return: they simply need to believe that a better description of portfolio risks will generally allow better management of those risks.
This insight provides investors with an improved currency risk management framework and with the opportunity to enhance total portfolio returns.
We also offer- Foreign exchange trading to help you minimize trading costs, manage currency risk, and increase portfolio performance.
- Currency overlay services to help you design an appropriate hedging program. We will manage your FX exposures according to your preferred strategic hedge ratio.
- Transaction cost analysis services to analyze your FX trades and suggest appropriate strategies if we find subpar trading results.
Russell Implementation Services, Inc., member of FINRA, SIPC. www.finra.org
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.
Conscious Currency: A new approach to understanding currency exposure
In this paper written by Ian Toner, Russell proposes a different way to look at the portfolio issues posed by currency risk.
View the executive summary and complete report.
