Insight's Currency capabilities | Insight Investment

Insight provides a broad range of currency solutions encompassing dynamic currency passive management, hedging and active currency strategies. So, the team can control unwanted currency exposure or seek additional investment returns. These approaches can be tailored to each client and help manage currency as an integrated part of their overall investment strategy.

Insight’s Currency Solutions Team has worked with institutional investors since 1991. Its skills include portfolio management, quantitative research, discretionary macroeconomic analysis, trading, collateral management and operational implementation.

Insight's currency team can tailor portfolio construction, collateral arrangements, implementation procedures and ongoing reporting requirements.

Tailoring can be made to each client’s asset allocation, risk tolerance and investment objectives. A solution can also evolve as those requirements change; for example, by moving from passive hedging to a dynamic approach or by adjusting hedge benchmarks and operational arrangements.

Insight’s passive currency strategies aim to deliver the benchmark return at minimal cost. To minimise costs the team looks at tracking error, liquidity, counterparty exposure, operational efficiency and best execution.

Insight offers informative and transparent reporting, helping clients understand both the effectiveness of their hedge and the factors affecting its performance. This service is designed around each client’s benchmark and governance requirements.

Insight’s dynamic currency approach seeks to limit the adverse effect of domestic-currency strength while preserving some of the potential benefit when the domestic currency weakens. The team adjusts hedge ratios by monitoring momentum, volatility, value, carry and quality. The objective is to create a more favourable distribution of outcomes than a static hedge, although this cannot be guaranteed.

For active currency portfolios, Insight combines risk-premia-based return sources alongside macroeconomic analysis. The team can use quantitative, discretionary or blended approaches, combining to build portfolios around clients’ objectives and risk budgets.