SKILLED
We help you manage complex currency exposure needs in uncertain markets.
SKILLED
We help you manage complex currency exposure needs in uncertain markets.

Currency overlay

Our team of currency professionals are located in Seattle and London, which allows us to provide superior service to our global client base. We offer three primary currency solutions to assist investors meeting their investment objectives:

  • Passive currency hedging
  • Dynamic currency hedging
  • Absolute return

Passive currency hedging

Why is managing currency exposure important? International investors receive a return consisting of the gain or loss of the foreign security plus the return on the currency used to purchase the security. Currency volatility can be significant and the return from the currency can sometimes swamp the gain or loss on the foreign security. Many investors are uncomfortable with this volatility and look to Russell Investments to help them manage this uncompensated risk.

Currency hedging can reduce or eliminate the foreign exchange volatility from holding international assets. An investor would hedge by selling foreign currencies that are implicitly included in an international portfolio and buying the domestic currency.

MarketVoice | Article reprint

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A profile on Russell Investments featuring Lisa Cavallari, head of derivatives trading.

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Russell Investments Implementation Services, LLC., member of FINRA, SIPC. www.finra.org

Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.

Currency overlay

Our team of currency professionals are located in Seattle and London, which allows us to provide superior service to our global client base. We offer three primary currency solutions to assist investors meeting their investment objectives:

  • Passive currency hedging
  • Dynamic currency hedging
  • Absolute return

Passive currency hedging

Why is managing currency exposure important? International investors receive a return consisting of the gain or loss of the foreign security plus the return on the currency used to purchase the security. Currency volatility can be significant and the return from the currency can sometimes swamp the gain or loss on the foreign security. Many investors are uncomfortable with this volatility and look to Russell Investments to help them manage this uncompensated risk.

Currency hedging can reduce or eliminate the foreign exchange volatility from holding international assets. An investor would hedge by selling foreign currencies that are implicitly included in an international portfolio and buying the domestic currency.

How our currency hedging program works

As your currency overlay manager, we:

  • Work with you to decide on the features of the program (for example, the frequency of rebalancing the hedge)
  • Gather portfolio information from your custodian
  • Calculate the amount to hedge for each currency
  • Manage trading and settlement Report monthly on the effectiveness of the hedge

RFX Network

RFX Network is a leading edge currency trading technology tailored to the needs of institutional investors. Take advantage of buy-side liquidity to make it easier to trade and less expensive to transact. For those investors who want to enjoy the benefits of Russell Investments' foreign exchange trading program but manage trading themselves, contact us.

Benefits of RFX

  • Sophisticated netting – select the best way to net your buys and sells
  • Community trading – match trades first with other buy-side investors before trading in the market
  • Fair allocation – allocate benefits from netting, matching and competitive spot and forward trading among all accounts
  • Flexible platform – upload complex trade lists including, spots, forwards, and swaps orders
  • Less expensive to transact – use over 50 liquidity providers for competitive rates

Electronic trading for institutional investors

Russell Investments and Integral Development, a leading FX technology company, have launched a unique foreign exchange trading application. The service, designed for the buy-side community, aims to provide advanced netting, best execution and fair allocation of trading outcomes. RFX Network has a sophisticated netting application, a peer-to-peer trading capability, and mid-market matching to reduce transaction costs.

Dynamic currency hedging

In our view, Russell Investments' Informed Dynamic Currency Hedging goes a long way to solving the conundrum of what, when and how much to hedge.

A smarter way to manage uncompensated currency risk.

As volatility rises in currency markets, investors are re-thinking their currency hedging policies and are looking to improve the risk-return profile of their international currency exposure. Russell Investments' Informed Dynamic Currency Hedging model (IDCH) which looks for opportunities to raise expected returns and reduce cash flow drawdown from currency hedging within an investor's international portfolio.

Learn more about our implementation solutions

Currency management

Our program can result in a cost effective solution for a core component of your trading and risk management initiatives.


Currency solutions

Execution services

Our seasoned team employs the latest advances in technology to find liquidity pools that reduce transaction costs and manage risk.

Execution solutions

Overlay
services

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

Overlay solutions

Transition management

We have helped clients manage their risks and investment performance when restructuring their portfolios or asset classes for over 25 years.

Transition solutions

 

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