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Dynamic Hedging

Objective

Dynamic hedging aims to vary the amount of hedging in order to provide better results than a static hedging strategy.

Our Approach

  • Dynamic hedges are applied to individual currency exposures.
  • The investment process was developed specifically for hedging purposes, with a special focus on identifying high-risk situations and reacting prudently.
  • Our systematic methodology combines momentum management and factor identification tools with macro-economic signals based on the portfolio views of our discretionary investment team.
  • The approach is based on clear and sensible principles, and can be applied to a wide variety of currency pairs including emerging markets.
  • Our analysts monitor the latest academic research and Foreign Exchange market trends to develop enhancements to our methodology.
Hedge Ratios On Currency Exposures

Hedge Ratios on Individual Currency Exposures

Benefits

  • The aim is to protect against adverse currency movements while allowing participation in favourable movements.
  • The cash flows resulting from hedging transactions should be improved versus static hedges.
  • The strategy can be customised by currency pair and applied to any benchmark between 0% and 100% hedge ratio.

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