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Hedging
Unrewarded currency risk in institutional investment portfolios typically comes about through the unmanaged exposure to developed market currencies that arises from international investing. We have two strategies to deal with such unrewarded risk – Passive Hedging and Dynamic Hedging.
Passive Hedging
Passive Hedging involves the symmetrical elimination of currency volatility, whether beneficial or adverse.
Record’s Passive Hedging programs are designed to minimise transaction costs and to make the resultant cashflows easier to manage. Our wide experience of currency trading, our painstaking attention to every detail of systematic processes, and our creative approach to problem-solving ensure that every client’s passive program matches their particular needs.
Dynamic Hedging
Dynamic Hedging imposes a systematic process to seek to protect against adverse currency movements, whilst allowing the client to benefit from positive movements. This is therefore an asymmetric process, which provides downside protection.
All of our experience in currency trading and program construction, as well as our thorough understanding of the behaviour of currency markets, is applied in constructing our bespoke Dynamic Hedging programs.
Currency for return
Record has a range of currency return-seeking strategies. These take advantage of key return opportunities in the currency markets, in particular the Forward Rate Bias, or FRB, and Emerging Markets.
Forward Rate Bias
At Record we regard the Forward Rate Bias as a fundamental and independent risk premium, or ‘beta’ in investment language. As such we have a range of strategies that exploit the Forward Rate Bias both passively and actively.
The strategies can be implemented through both pooled fund and segregated structures. Returns vary according to the risk budget applied. Thanks to the nature of our systematic investment processes, programs can be structured to meet a wide variety of risk/return objectives.
Record currently has eight pooled funds exploiting passive and active Forward Rate Bias strategies, denominated in Sterling, Euro and US Dollar.
The funds are open to institutional investors of all types. The minimum investment is €250,000 or its equivalent in other currencies.
All the Record Currency funds are Non-UCITS Qualifying Investor Funds, domiciled in Dublin, and form part of the Record Umbrella Fund. The fund’s trustee and custodian is Northern Trust Fiduciary Services (Ireland) Limited.
Emerging Markets
We have a range of strategies that are intended to exploit the long-term appreciation potential of emerging market currencies. These strategies can be implemented through currency forward contract positions, or more bespoke mandates. Opportunities also exist for optimising existing emerging market currency exposure in underlying equity and bond portfolios.
Record also provides cash management (including ‘equitisation’) to support implementation of currency management mandates when appropriate. | 
