Currency

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Foreign currency exposure can add unwanted volatility, but also a source of alpha. Our customised currency solutions can help your strike your desired balance between hedging and seeking alpha.

€47.3bn

currency solutions assets under management¹

members in Insight’s currency team²

21 years

average experience²

building blocks in Insight’s approach to currency – passive hedging, dynamic hedging and absolute returns

We believe that our Currency Solutions Team is one of the industry’s most experienced teams, specialising in quantitative solutions, risk management techniques and macro discretionary strategies.

Francesca Fornasari, Head of Currency

Managing currency exposure

Foreign currency exposure can add unwanted volatility, but also a source of alpha. Our customized currency solutions can help your strike your desired balance between hedging and seeking alpha.

Passive currency hedging Read more Read less

Dynamic currency management Read more Read less

Absolute return currency Read more Read less

The configuration of a currency overlay portfolio is an interactive and multi-faceted process.

Our approach is to work in partnership with our clients to define the optimal:

Solution design
Portfolio construction
Collateral management
Implementation procedure
Ongoing service and reporting needs

Our approach is fully modular and ideal for designing fully customised solutions to best meet the requirements of our clients.

Why Insight for passive investing?

We aim to deliver the benchmark return at minimal cost. With this goal in mind, we are particularly focussed on tracking error, liquidity risk management, counterparty risk management, operational efficiency, best execution and informative and transparent reporting
As a full-scale provider of currency solutions, we are able to evolve our solutions to fit our clients’ changing requirements
Our experience in the currency absolute return space can support our clients in setting the right level of benchmark
Insight has extensive experience with all underlying asset types and can accommodate nuances within a strategy
Insight’s reputation and market leverage helps to ensure that we can deliver competitive execution pricing for our currency clients

Our dynamic hedging solutions seek to mitigate the adverse impact of domestic currency strength on portfolio returns, while maintaining exposure to the supportive impact of domestic currency weakness.

In other words, we aim to introduce asymmetry in currency returns.

Our approach to delivering a bespoke dynamic hedging solution is usually quantitative in nature, fully modular, and relies on two key components:

Currency Risk Management (CRM) is our core hedging engine. This component is akin to an insurance policy and serves as a tail hedge instrument to protect against adverse currency moves
Alternative Risk Premia (Alt Risk Premia) is our return-seeking engine and is designed to improve the expected return of the combined dynamic hedging strategy

The optimal combination of these two components is driven by our clients’ objectives – balancing expected returns versus the need to protect against adverse currency moves.

Our solutions can be tailored to a client’s specific asset allocation and risk tolerance while delivering against multiple goals.

Furthermore, the breadth and depth of our expertise allows us to support our clients by providing bespoke analysis, thought leadership/white papers and market commentary.

Our core belief is that currency markets are driven by a combination of macro-economic developments and risk premia. As such, our investment philosophy aims to cover both areas through independent alpha generation processes, namely:

A quantitative approach to modelling alternative risk premia
A macro discretionary approach to analysing macroeconomic fundamentals

Our approach generates six independent currency alpha streams each with different characteristics and different expected behaviours. We use these differences to construct portfolios that help our clients achieve their bespoke objective.

These can lead to purely quantitative, purely discretionary, or blended portfolios.

Key building blocks for our approach to delivering alpha

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For illustrative purposes only.

30 years in currency markets

Meet some of our team

Insight’s currency solutions team have managed currency solutions for institutional investors since 1991. This team of 22 investment professionals, headed by Francesca Fornasari, has an average of 21 years’ industry experience.¹ We believe that this makes Insight one of the most stable and experienced teams in the industry.