With contributions from Commerzbank and Pioneer Investments, this webinar will take part on Tuesday 6th October to discuss different aspects of hedging currency risks in emerging markets, such as assessing value of currency risk and how to manage the subsequent risks.
Currency risk is a complex thing. Hedging would seem to protect against these risks. But it is not so simple. For an investor, a forward hedge which locks in a future rate can come to seem like a very bad idea if it loses money, as it will have to be paid out in cash.
Most corporates can fully offset the volatility of currency cash flows and net investments in an accounting sense yet in emerging markets forwards can be at times punitively expensive. Are options or forwards more appropriate protective hedge contracts, and why?
What will this webinar discuss?
Jessica James, Head of the Quantitative Solutions Group at Commerzbank will discuss different aspects of hedging currency risk:
- Cashflows. It is not often realised how volatile currencies can be. Hedges can incur costly cashflows if they go wrong.
- Volatility in currency markets is suddenly high again. Is it possible to hedge away at reasonable cost?
- Hedging with forwards vs hedging with options – options can have some unexpected advantages.
Satu Jaatinen, Global Head of Corporate Solutions at Commerzbank, will discuss assessing value in hedging emerging markets risks:
- Risk and Cost to KPI’s
- Importance of Timing and Instrument Choice
Andreas König, Head of Foreign Exchange Europe at Pioneer Investments, poses the question how does a major bond or stock investor or corporate with foreign investments, deal with emerging market currency risk?
While investors want an efficient portfolio, and can obtain an efficient portfolio in principle, the reality is that many obstacles stand in the way of achieving this goal. Join our Global Equity team as they talk about ways to better target your investment objectives by focusing on strategies providing strong risk-adjusted returns, instead of concentrating risk in less-efficient strategies that take on high levels of active risk.
The team will discuss their research paper, Improving Active Risk Budgeting, which explores a common misconception of investors – the belief that overall equity portfolio risk is best managed by allocating the majority of the equity allocation to index strategies, while incorporating managers with a high level of active risk to generate outperformance. Our research found that in reality, such an approach often delivers inferior overall portfolio risk-adjusted returns.
Register now to secure your place and learn about a better way to maximize your risk-adjusted returns.
What’s next for investors? Northern Trust’s Chief Investment Strategist Jim McDonald and Claire Meier, sovereign analyst for international fixed income will discuss our long-term investment outlook. Learn about:
• The key investment themes you’ll want to watch in the years ahead
• Our 5-year economic and financial market return forecasts
• What it means for your investment portfolio
Join us on September 14 at 9:30 a.m. CT. Register now.
The Alternatives Series by Direxion - Exploring The Role of Alternative Strategies In Modern Portfolio Allocation
Direxion Funds invites you to participate in our next Knowledge Building Series event on November 15, 2011. Hosted by Ed Egilinsky, Direxion’s Head of Alternatives, this webinar will explore how currencies can offer further portfolio diversification, and risk mitigation. Join us as we provide answers to the following questions:
Why are currencies recognized as a unique alternative asset class?
- How does employing the right strategy provide investors with the potential to benefit when the U. S. Dollar is rising and/or falling?
- How can retail investors participate in these markets?
- How do currencies fit into overall portfolio allocations? and;
- Which clients are appropriate for these types of investments?
Direxion offers investment professionals and investors the means to seek improved risk-adjusted returns in various market conditions, through a diverse suite of tactical investment products.Direxion offers investment professionals and investors the means to seek improved risk-adjusted returns in various market conditions, through a diverse suite of tactical investment products.