CURRENCY OVERLAY: WHY AND HOW?

Currency overlay: why and how?

The teach-in will be relevant to trustees who are members of their investment committees, and others who would like to understand the potential impact of currency risk on their portfolio and how to mitigate it.

 


A brief synopsis of what the session will cover

Using the example of a hypothetical GBP-based investor, we’ll demonstrate the impact of leaving currency unhedged in an international bond and equity portfolio over the period 2000-18 and then examine the impact of applying passive and active hedging solutions to these portfolios.

SPEAKER

Amy Middleton – Senior Vice President, Currency Specialist

Topics to be covered

  • The importance of currency risk in an international portfolio, and how it can be significant for GBP-based investors if left unhedged;
  • The commonly held myth that currency ‘washes out’ over time.  Why this is generally not true, and why it requires careful consideration;
  • Applying a passive hedging programme to significantly reduce currency risk and how this might work?
  • Using an overlay strategy to minimise currency risk and provide the investor with potential to benefit from favourable moves in the currency

Learning outcomes  

  • Understanding that leaving currency exposure unhedged can add considerable ‘unintentional’ risk within an international bond or equity portfolio;
  • By adopting a passive overlay programme, the investor may substantially reduce the amount of risk contributed by currency; 
  • An active overlay programme, where the hedge ratio is adjusted as a function of a systematic strategy, may offer a solution for minimising risk whilst also benefitting from favourable moves in the currency.

WHEN AND WHERE IS THIS TEACH-IN?

16:30-17:30 on Tuesday 30 October 2018 at the PLSA's new offices in London - 24 Chiswell Street, Moorgate, London, EC1Y 4UE

Registration from 16:15

FEES

 Non-members-£100 + VAT (per meeting) 

- FREE TO MEMBERS -

- EARN CPD CREDITS -

BOOK NOW


For more information please contact Anna Dixon on tel: 020 7601 1765 | anna.dixon@plsa.co.uk