AUTUMN 2011 A
look through the pages of The Wall Street Journal or Financial Times over the past few weeks
shows how much currencies have come to central stage in discussing global economics. The phrase “currency wars” has returned as Japan, Switzerland and Brazil become the latest nations to intervene and defend their currencies. Brazil’s story is the most recent example of how asset values held in global portfolios can be affected by the roller-coaster ride of currency values. Its real strengthened by around 46% against the dollar between the end of 2008 and August this year. September then saw it losing 11% because of risk aversion in the eurozone.
This is an example, many will argue, of why, in today’s volatile and uncertain economic environment, it has never been more important that investors choose the right strategy to defend their international portfolios against huge swings in currency values. With that in mind we have included in this edition two features examining the relative merits of both passive and active currency management strategies for addressing currency risk. While Brazil’s story was one of high growth rates, it also mirrors much of Latin America, and the currency threats and opportunities of that continent, are the focus of our regional report.
This edition also sees the introduction of regular Forum and Roundtable features. In the former we have three of the largest pension funds in the world giving their expert viewpoints of how FXUUHQFLHV ÀW LQWR WKHLU LQYHVWPHQW DQG KHGJLQJ VWUDWHJLHV :KLOVW in the latter article three leading investment consultants offer insights into how investors should go about choosing the right currency manager and strategy.
A fascinating Expert Opinion piece we are running from Ian Toner at Russell, proposes a different way to look at the portfolio issues posed by currency risk. He argues that the Conscious CurrencyTM approach, which recognises currency as a stand-alone opportunity set, can bring more clarity and consistency to the long standing challenge of currency market risk and can also provide a useful framework for evaluating currency managers.
Finally we conclude this edition by asking whether the currency asset class has been too easily overlooked by retail investors and how, through a variety of services, high net worth and retail investors can now gain access to a wide variety of currency investment products to help them diversify their portfolios and lower risks.
Gerry O’Kane Editor
Gerry O’Kane Gerry.Okane@currency-
investor.net Editor
Charles Jago Charles.Jago@currency-
investor.net Publisher
Susan Rennie
Susie.Rennie@currency-
investor.net Editorial Director
Charles Harris Charles.Harris@currency-
investor.net Advertising Manager
ASP Media Ltd Suite 10, 3 Edgar Buildings
George Street, Bath, BA1 2FJ United Kingdom Tel: + 44 1208 821 802 (switchboard) Tel: + 44 1208 821 801 (sales & editorial) Fax: + 44 1208 821 803
Design and Origination: Phill Zillwood Design Works
Phill.design@
btconnect.com Printed in the UK by Imagery UK
Currency Investor (ISSN 1747-4051) is published quarterly
www.currency-investor.net
Subscriptions Please call our subscriptions hotline for further details:
+44 (0) 1208 821 801 or email
subs@currency-investor.net
Disclaimer $63 0HGLD /WG DQG LWV UHVSHFWLYH RIÀFHUV GLUHFWRUV and employees does not recommend, or endorse any of the securities, commodities or investments appearing in this magazine. The views expressed in Currency Investor magazine are not necessarily those of ASP Media /WG ZKLFK LV QRW D ÀQDQFLDO DGYLVRU DQG GRHV QRW JLYH investment advice. ASP Media Ltd is not an investment PDQDJHPHQW FRPSDQ\ D OLFHQVHG ÀQDQFLDO DGYLVRU registered investment adviser or registered broker-dealer DQG GRHV QRW SURYLGH LQYHVWPHQW RU ÀQDQFLDO DGYLFH RU make investment recommendations. Although every effort has been made to ensure the accuracy of the information contained in this publication, the publishers can accept no liabilities for inaccuracies that may appear. Readers are advised to consult a professional investment advisor before undertaking any investment activities associated with currencies.
The entire contents of Currency Investor are protected by copyright and all rights are reserved.
Helen Rochford
Helen.Rochford@currency-
investor.net Production Manager
Michael Best
Michael.Best@currency-
investor.net Subscriptions Manager
David Fielder
David.Fielder@currency-
investor.net Features Manager
Larry Levy Digital Events Manager
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92