Managing currency as a source of alternative alpha as well as for the purpose of risk management has come to the forefront of investors’ minds over the last 10 years. As businesses continue to grow across borders, managing the risk associated with currency has taken on a more central role. The retail sector has also taken note. Elise Coroneos reports.
Investors tired of waiting for the equity markets to deliver the returns they once did are increasingly allocating to currency specialists, whether it be through commodity trading advisors or instruments such as exchange-traded funds.
The Bank for International Settlements’ Triennial Central Bank Survey, published in April, showed a considerable increase in the size of the global FX market since the last survey was taken in 2007. Average daily turnover in global foreign exchange is up 20% from $3.3tr in 2007 to $4tr today.
And its relevance for...