Currency Management

Proactively managing currency risk.

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What 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

Reduce the operational burden of managing FX

Improve portfolio risk-return profile

Improve portfolio risk-return profile

Lower transaction costs

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.

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 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. By month-end May 2025, the team managed over £42.96 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.

£1.8 T

Assets traded in 2023

110

Tradable markets

23

Traders all specializing by asset class and instrument

18.5

Trading specialist average years of experience

Source: Russell Investments. Data as of 31 December 2023 unless otherwise noted.

Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute investment advice.

The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested.

 

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Customised Portfolio Solutions


Specialist expertise and strategies to help your team gain greater portfolio control, limit costs, reduce risk, and enhance returns.

Transition Management

We assist our clients in managing their investment performance and risks when restructuring their portfolios or asset classes.

Interim Asset Management

Manage cost and smooth the transition between investment managers while maintaining performance, reducing risk and administrative burden.

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An essential tool for managing large pools of capital as derivative overlays help manage risk elements and improve performance.

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Execution solutions to achieve enhanced returns using the latest advances in technology to find liquidity, reduce transaction costs and manage risk.

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