Currency decisions are a crucial aspect of the investment decision-making process, as the inherently dynamic nature of currency values can significantly impact an investor’s portfolio return.
With full flexibility to choose between base, local currency and virtually hedged returns, PEARL helps asset owners and managers analyze portfolio returns against currency movements, in alignment with their mandate.
For investors implementing currency overlay strategies, PEARL offers an advanced currency overlay attribution model. Gain a deeper insight into how hedging decisions impact portfolio performance, to effectively manage and measure exposure to currency movements.
Assessing the true contribution of currency decisions
Split out currency impacts by calculating local and base returns
Proxy a hedge return, to understand the implications of alternative hedging strategies
Adjust currency forward and/or rollover calculations methods per asset class to match internal policy
Model currency benchmarks that represent different steps in a currency overlay strategy
Compare the hedging strategy to the actual currency exposures to assess the impact of all currency decisions on total fund performance
Enhance your understanding of performance including currency hedging
In combination with PEARL’s decision-based attribution, make better decisions across:
- Strategic hedging policy
- Tactical deviations away from policy
- Proxy hedging
- Rebalancing timing
- Not hedging specific currencies
- Implementation drift
- Instrument selection
Our insights on currency in investment decision-making
Currency overlay attribution in PEARL
Contact
Stefano SJ Lee
Managing Director - Asia Pacific
Elske van de Burgt
Managing Director Investment Performance