Currency risk management

At Insight, we view unintended exposure to foreign exchange rates as a significant unmanaged risk in portfolios. Global currencies are prone to extreme moves, owing to structural breaks in drivers of currency or market cycles. Sources of returns and generators of losses can shift rapidly with significant portfolio consequences. Currencies exhibit multi-year trends that can erode an international asset portfolio.

Long track record: we have been managing currency risk for our clients for over 25 years, helping clients to define policy objectives and constraints and assess the trade-offs relevant to currency policy formulation.

Client focused: CRM is an active hedging program that is tailored to manage clients' foreign currency exposure and risk sensitivity. It employs a proprietary, quantitative model with a highly flexible framework to accommodate a range of client requirements.

Advanced statistical modeling and monitoring: proprietary currency models monitor hedge levels and calculate adjustment trades. Tight operational and risk controls are embedded in our systems and processes.

Robust portfolio construction: we manage portfolios against a range of benchmark hedge ratios from 0% to 100% and adhere to strict downside loss constraints as well as incorporating a variety of value adding elements that seek to capture value as opportunities arise. CRM is a systematic program that is supported by state-of-the-art infrastructure and an experienced trading desk with dedicated client portfolio managers.


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Further reading

Currency Risk Management Profile

Insight has been offering active currency risk management for more than two decades and has a long-standing philosophy that currency risk is unrewarded and needs to be managed

Currency risk management in Numbers

24year track record

24 investment professionals in Currency Group

$41.1bn in currency risk management exposures

All data as of December 31, 2016. Assets under management (AUM) are represented by the value of cash securities and other economic exposure managed for clients.

Insight is the corporate brand for certain companies operated by Insight Investment Management Limited (IIML). Insight includes, among others, Insight Management (Global) Limited (IIMG), Pareto Investment Management Limited (PIML), Cutwater Asset Management Corp (CAMC)  Cutwater Investor Services Corp (CISC) and Insight North America LLC (INA), each of which provides asset management services.
 
INA, CISC, CAMC and PIML each provide asset management services. INA, CISC and CAMC are investment advisers registered with the Securities and Exchange Commission (SEC) each with its principal place of business at 200 Park Avenue, New York, NY, 10166.  PIML is an investment adviser registered with the SEC and is authorised and regulated by the Financial Conduct Authority (no. 416024). Registered in England and Wales. Registered number: 03169281. Registered office: 160 Queen Victoria Street London EC4V 4LA, UK. INA, CISC and PIML are each is also registered with the CFTC as a Commodity Trading Advisor and Commodity Pool Operator and each is a member of the National Futures Association (NFA).  INA is registered as an investment adviser with the SEC and with the CFTC as a Commodity Trading Advisor and is a member of the NFA.All entities are wholly owned subsidiaries of the Bank of New York Mellon Corporation.