Our currency strategies, both overlay and alpha, are implemented by our New York-based Currencies team.
We can calibrate our overlays’ risk budget to match your unique risk and return requirements, and as our strategy is portable by design it can be overlaid onto any portfolio.
Overlay strategies on assets worth
EUR 21.1 bn
Dedicated currency resources since
average investment experience
dedicated currency specialists
Head of Currencies
Adnan Akant, PhD, is the Head of the Currencies team at BNP Paribas Asset Management. He is responsible for currency alpha and overlay portfolios as well as the currency portion of global/international portfolios. Adnan joined FFTW, a predecessor of BNP Paribas Asset Management, in 1984 and is today based in New York. Prior to working with us, Adnan managed the World Bank’s liquidity portfolio and advised the Treasurer on the Bank’s multi-currency borrowing program. Adnan has 38 years of investment experience. He holds a PhD in Systems Science, a MS in Finance, as well as BS and MS degrees in Electrical Engineering and Computer Science from MIT. He is also a member of the New York Academy of Science and Sigma Xi, The Scientific Research Society.
Hear from Adnan Akant
Head of Currencies
Investment Philosophy and Process
Unhedged international bond and equity returns can be dominated by currency movements, so in our view it is important to manage currency risks separately. We believe that hedging against adverse currency movements can significantly boost risk-adjusted portfolio returns, and an active currency strategy can further improve performance potential.
To passively hedge against currency movements, we work closely with you to tailor an optimised hedge ratio based on your existing portfolio mix. However, we believe the best way to improve the currency hedging outcome is to use a dynamic hedge ratio that aims to capture upside movements while limiting downside potential for each currency.
If you are looking to use currencies as an asset class to enhance performance, we use a combination of quantitative analysis and qualitative judgment. Our aim is to generate excess returns by structurally exploiting certain characteristics and inefficiencies of the currency markets while managing downside risk.
Dynamic Currency Hedging Overlay
Our dynamic currency hedging programme has a long track record and has shown its ability to protect portfolio value against weakening currencies and participate in upside currency movements.
We dynamically adjust the hedge ratio based on the theory of ‘trend’, using a systematic approach to determine the best ratio and dynamically rebalance it based on changes in market conditions. We can apply hedging mandates to any portfolio, whether it be managed by BNP Paribas Asset Management or an external asset manager.
- A cost-efficient way to hedge against adverse foreign exchange movements
- Provides a better hedge against currency movements than a static hedge ratio
- Can be used as an overlay to any portfolio
- Customised solution based on your individual investment profile
- Experienced investment team of dedicated global currency experts
Currency Alpha Strategy
Our currency alpha strategy takes long and short positions in global currencies (approximately 10% to G20 currencies, with the remainder to G3, European and dollar-bloc countries) to produce a portfolio that is well diversified in terms of the number of currencies invested in, investment style and time horizon. Actively managed, the strategy had a 12-year track record.
The strategy is not managed against a benchmark. It aims to outperform one-month Libor.
- Well-diversified absolute return global currencies strategy
- Exploits currencies as a source of alpha in their own right
- Three in-house models combined with judgemental overlay ensure appropriate diversification
- Sophisticated risk control techniques aiming to reduce drawdown potential
- Experienced investment team of 5 global currency experts