The absolute return currency strategy is a systematic approach that aims to capitalise on the factors responsible for currency returns. This strategy creates an intentional exposure to proven factors that drive currency returns. Currency returns have a low correlation with conventional assets, providing additional diversification benefits.
Currency Management
Proactively managing currency risk.
Partner with usWhat is currency management?
When institutional investors make allocations to international assets, they are exposed to exchange rate fluctuations. That currency exposure can have a large impact on realised returns. Currency management uses currency hedging and absolute return strategies to minimise the risks of currency exposure and seeks to use currency factors as a source of diversified return.
We offer a comprehensive currency management strategy and resources with experience and expertise to help your organisation:
Reduce the operational burden of managing FX
Improve portfolio risk-return profile
Lower transaction costs
Our suite of customised currency management solutions
As a leading global currency manager, Russell Investments has deep experience meeting the needs of sophisticated institutional clients globally. Our highly knowledgeable currency specialists work alongside you to tailor a strategy that helps minimise the currency risk in your international portfolio. Supported by a disciplined and proven implementation framework, we execute using our dedicated foreign exchange (FX) trading as both an agent and fiduciary. We can help manage operational, counterparty, and settlement risk and deliver ongoing support and comprehensive performance reporting.
Currency hedging using forward exchange contracts is an effective strategy to reduce the unrewarded risk from currency exposure. A currency hedge creates positions that move in the opposite direction to the currency exposures in the underlying portfolio to help minimise risk. In a passive currency hedging program, we hedge a static percentage of the foreign currency exposure.
Dynamic currency hedging is a technique that allows the currency hedging ratio to be adjusted over time to generate greater excess returns than a passive hedge. The ratio can be modified based on currency valuations, interest rates, and other factors that affect currency returns. By adopting dynamic currency hedging, investors can enhance the risk-return outcomes of their portfolio compared to static hedging policies or no currency hedging at all.
Our FX trading platform is designed to meet your currency strategy needs. We execute trades on an agency-only basis, accessing multiple sources of liquidity with an experienced team overseeing the trading process. Our specialist FX traders actively manage the quality of execution from the portfolio level in real-time, adjusting the trading strategy on an order-by-order basis in response to changing market conditions or security-specific developments. We execute trades with multiple venues, actively transacting through numerous global execution outlets with unbiased access to a broad array of liquidity sources. Our centralised FX trading platform accesses multiple banks, dealers, and streaming liquidity sources, minimising costs via netting, crossing, and high-quality execution.
Why choose Russell Investments as your currency manager?
Holistic FX platform
Our pure agency trading platform enables meaningful netting and matching opportunities for efficient, cost-effective, and confidential trading. In 2023, we traded across 190+ currency pairs.
Dedicated currency expertise
Our currency team specialises in the design and execution of currency strategies tailored to the individual requirements of each client. The team manages over US$50 billion assets in currency strategies.
Disciplined end-to-end process
Supported by proven processes and robust infrastructure, our team builds guidelines according to your unique requirements maintaining ongoing monitoring and detailed transparent reporting to underlying performance. Reduce your operational burden and gain peace of mind.
$3.5 T
Executed assets in 2023
110+
Tradable markets
23 traders
All specialising by asset class and instrument
18.5
Trading specialist average years of experience
Russell Investments, data as of 31 December 2023. Currency is in AUD.
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