Russell Investments has undertaken considerable research into currency factors and has created transparent rules-based strategies for three of the strongest factors: carry, value and trend. In the current post-quantitative easing (QE), low-return environment, we believe investors should consider adding currency factor exposures to their multi-asset portfolios. Such so-called "smart beta" strategies can help to enhance returns with modest or no additional risks, given the low correlation of currency strategies to traditional asset class strategies. In this paper, we look at:

  1. Three smart currency factors: carry, value and trend
  2. Putting the Russell Conscious Currency® Index (RCCI) strategy into practice
  3. Current client adoption of the RCCI strategy and use of bespoke or dynamic factor weightings
  4. Russell Investments' research into development of a rules-based, dynamic factor-weighting approach
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