State Street Global Markets

Currency Management

Overview

At State Street Global Markets, we understand the effect currency can have on your portfolio and the importance of improving your risk-adjusted performance. As an industry-leading currency manager, servicing approximately $80 billion in assets* for some of the largest institutional investors globally, we have time-tested, robust investment and operational models in existence, and offer a full suite of research-based advisory services as well as implementation and investment strategies tailored to meet your currency needs. 

Currency Alpha Program

We have seen an increasing number of institutional investors turning to currency as an asset class in pursuit of uncorrelated, sustainable returns. If you are looking to diversify your current asset allocation, our sophisticated approach to generating returns within the FX market may help you achieve this goal. Our investment philosophy at State Street Global Markets is based on the conviction that persistent, empirical regularities in the FX markets can be exploited to generate alpha. With a disciplined investment approach and unique optimization and risk management processes, our currency alpha program has achieved a strong track record of outperformance among our peers and other industry benchmarks.

Passive Currency Hedging

We provide highly customizable currency hedging services to mitigate the uncompensated currency risk from investment decisions within your portfolio. If you have a strategic hedging policy in place, we offer a cost-effective and operationally efficient alternative to in-house management. As part of our advisory services, we can also offer you additional guidance in understanding the impacts of currency risk on your portfolio and the alternatives to hedging that risk. Our research can help you identify strategic hedge ratios that minimize excess volatility while also considering the diversification benefits that foreign currencies can introduce into your portfolio.

Portfolio and Share Class Hedging for Investment Managers

We have pioneered the portfolio and share class hedging initiative to assist investment managers like you in offering currency hedged products. This allows you to distribute all of your products across various geographic markets by replicating fund excess returns across multiple share classes. Our efforts have extended beyond implementation and execution to include one of the industry’s leading performance decomposition reporting, ensuring complete transparency to performance dispersion across share classes and against benchmarks. This level of detail provides you with insightful information to more effectively communicate with your customers.

*As of June 30, 2012

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