GLOBAL - Investec Asset Management has launched an actively managed currency fund targeting pension funds and other institutional clients.
The high-risk return fund, which targets a tracking error of 33% and returns of around 25% p.a., has been designed to enable pension funds to make 'meaningful' returns on an allocation of only 1% to 2% of their assets. Despite being hedge fund-like in terms of risk, the fund will have daily liquidity.
Investec's currency management style, described as 'disciplined discretionary', uses both quantitative and qualitative inputs. The fund will encompass the ten major currencies and over 25 developing market currencies.
Speaking about the new fund offering, Investec's head of currency management Thanos Papasavvas said: "We believe that active currency management can add value to portfolios, allowing them to benefit from the inefficiency and liquidity of currency markets as well as offering the added bonus of low correlation with other asset classes."
Papasavvas added that the fund had been created following demand from pension funds. He pointed out that it was uneconomical for small to medium-sized pension funds to have segregated accounts and argued this fund would provide easier access to the asset class.
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