currency risk management

Currency risk management is a recurring problem for asset managers who invest part of their clients’ portfolios in foreign currencies.

Three options are available to the manager :

- hedging through a forward or a swap

- no hedge

- dynamic management of the currency risk

A leader in currency risk programs for institutional clients has launched a currency overlay product that allows asset managers to manage the currency exposure in its clients' individual portfolios.

The manager will simply buy units in a compartment of the product corresponding to the clients’ currency risk profile.