Proactively managing currency risk.
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:
Improve portfolio risk-return profile
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 embedded 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.
Russell Investments was named winner of “Factor Investing Offering of the Year” at the 2023 European Pensions Awards. The judges commented that “Impressive and continual research, client education and an ESG focus all put this factor investment specialist ahead of the rest.'”
Currency hedging using forward exchange contracts is an effective way of reducing 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 allows the currency hedging ratio to be flexible over time to generate greater excess returns than a passive hedge. The currency hedge ratio can be adjusted to currency valuations, interest rates, and other factors that drive currency returns. Investors can improve the risk-return outcomes of their portfolio relative to static hedging policies or no currency hedging at all.
The absolute return currency strategy uses a systematic approach to extract benefits from factors responsible for currency returns. This strategy creates an intentional exposure to proven factor exposures. Currency returns demonstrate a low correlation to mainstream assets providing additional diversification benefits.
Your currency strategy is supported by our FX trading platform executing, 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 2022 we traded across 142 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 £40.4 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.
Investment professionals located globally*
Experience in implementation services
Ability to trade
Quoted figures above are as of 31 December 2022.
*Data as at 31 March 2023.
RECENT BLOG POSTS
Hear from our experts on the issues our clients care about most
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.
Customised Portfolio Solutions
Specialist expertise and strategies to help your team gain greater portfolio control, limit costs, reduce risk, and enhance returns.
Managing assets in transition to minimise unnecessary costs and mitigate unrewarded risk.
An essential tool for managing large pools of capital as derivative overlays help manage risk elements and improve performance.
Improve control of exposures and risk-adjusted returns and reduce the cost of production while keeping your investments precisely aligned to your beliefs without sacrificing the power of a multi-manager approach.
Enhanced Portfolio Implementation is a platform designed for asset managers which combines all advisory models and investment insights into one centrally managed segregated account.
The information on this website is only intended for use by professional clients, regulated financial advisers and intermediaries who are knowledgeable and experienced in the financial services market and in investment products of this nature. If you are a retail or individual investor then please leave this website immediately and consult your financial adviser.
You should not use this website unless you understand its nature and the extent of your exposure to risk. You should also be satisfied that the website and investments are suitable for your client in light of their circumstances and financial position.
The information contained on this website is for information purposes only and you should not take it as constituting an offer, solicitation, inducement, commitment or invitation to subscribe for or to purchase, sell or hold any interest in any of the investments mentioned herein.
This website is not intended for distribution or use by anyone in any jurisdiction in which such distribution or use would be prohibited. Nothing on this website or in the materials referred to therein constitutes, or is intended to constitute, financial, tax, legal or other advice.
The value of investments, and the income from them, can go down as well as up and you may get back less than the amount invested. Any past performance figures are not necessarily a guide to future performance.
The website may contain forward-looking statements, which are based on a number of assumptions regarding present and future business strategies, which may or may not prove to be correct. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance.
Issued by Russell Investments Limited. Company No. 02086230 and Russell Investments Implementation Services Limited Company No. 3049880. Registered in England and Wales with registered office at: Rex House, 10 Regent Street, London SW1Y 4PE. Telephone +44 (0)20 7024 6000. Authorised and regulated by the Financial Conduct Authority, 12 Endeavour Square, London E20 1JN.
All reasonable care has been taken by us to ensure that the information contained on this website is accurate at the time of publication. However, we accept no responsibility for the accuracy, adequacy or completeness of the information and materials contained on this website and expressly disclaim liability for errors or omissions in such information and materials. We and our respective affiliates do not have any obligation to update the information contained in this website and reserve the right to change these terms and conditions at any time, without notice.
We will not regard you or any person who accesses this website as our client in relation to any of the investment products or services detailed therein, unless expressly agreed.