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Buy Side

CTAs Continue to Struggle in Tough Environment Data from Societe Generale Prime Services reveals that the majority of its CTA indices show that these firms continued to post negative returns during November. The SG CTA Index posted a negative return of -1.83% and is now down overall -3.38% YTD. The SG Trend Index fared slightly better, returning -1.25% in November, but remains the worst performing index for the year at -6.79% YTD. The SG Short Term Traders Index (STTI) was the only index to post positive performance in November, returning 0.43% for the month with six out of the 10 constituent CTAs contributing positive returns.
Schroders Appoints Asia FX Head Asset management firm Schroders has appointed Sok Mun Wong as head of fixed income and foreign exchange trading for Asia. In what is a newly created role Wong will be based in Singapore, Schroders’ central trading hub in Asia. She joins Schroders from Tudor Capital, Singapore where she was held the post of trader – head of singapore execution team for the past two years. Prior experience includes The Rohatyn Group, ABN Amro Private Bank and Black River Asset Management.
Study: US Corporates Hedging Less FX Exposures A recent study from Chatham Financial finds that less US corporates are hedging their currency, interest rate and commodity risk exposures than three years ago. The study, which analyses the 2015 financial risk management practices of more than 1,500 publicly listed corporations in the US, found that the number of overall companies utilising currency and commodity hedges fell three percent from 2012 to 37% last year. It also found that only 55% of firms with exposure to currency risk actively manage this risk through the use of financial hedges.
New Study Highlights Hedge Fund Tech Spending Hedge fund managers are increasing their investment in technology to create competitive advantages and address regulatory and operational concerns, according to a new study by KPMG International, the Alternative Investment Management Association (AIMA) and the Managed Funds Association (MFA). The study polled more than 100 global hedge fund managers representing approximately $300 billion in assets under management (AUM) and found that 90% of these firms are investing in technology to improve controls and compliance. A similar amount, 88% of respondents, said that efficiency objectives were their top reason for investing in technology.
UK SMEs Unprepared for Impact of Brexit on FX Costs UK small- and medium-sized businesses (SMEs) remain exposed and unprepared for the economic impact of the Brexit vote on their FX costs, according to a survey by EarthportFX, a cross border payment network. Despite the fact that 77% of survey respondents acknowledged the need to change their approach towards foreign exchange hedging in the face of highly volatile currency markets and the depreciation of the pound following the UK's decision in June to leave the EU, 80% admit they have made no changes to their hedging strategies.
CTA Performance Down for September Commodity trading advisors (CTAs) endured another difficult month in September, according to data from Societe Generale (SG) Prime Services. Its flagship SG CTA Index ended the month down 1.2% and overall in Q3 it entered negative territory for the first full quarter since Q2, 2015. All of SG's managed futures indices had negative performance in September, with the SG Trend Index down -1.93%. The SG CTA Index continues to lead performance year to date however, and is still in the black at 0.95%, followed by the SG Short Term Traders Index up 0.59%.
BlueCrest Closes FX Vol Desk? Market sources tell Profit & Loss that systematic hedge fund BlueCrest Capital Management is closing its FX volatility desk. Sources familiar with the matter say that up to 20 employees could be affected by the closure. BlueCrest continues to trim its business, at the end of last year it returned all money to investors and focused on managing its own funds, mainly through macro-economic strategies. At the same time, Reuters reports that six members of the firm’s equities team have left to join US fund Citadel to run its global quantitative strategies fund.
Standard Life Adds to EM Team Asset manager Standard Life Investments has added to its team of five emerging market debt specialists with the appointment of Imran Ahmad as investment director – emerging market debt (EMD). Ahmad, who has 12 years’ experience in the industry, joins the company from JP Morgan Asset Management where, since January 2013, he held the role of currency portfolio manager. Reporting to Richard House, head of emerging markets fixed income, Ahmad will be based in London and have primary responsibility for emerging market currency overlay strategies across the entire EMD suite of funds.
AIMA Unveils New Chair, Board The Alternative Investment Management Association (AIMA) has announced a new chairman and the formation of a new AIMA Council, the Association’s global board of directors. Taking over as AIMA Chair is Simon Lorne, vice chairman and chief legal officer, Millennium Management. He replaces the former SEC commissioner Kathleen Casey, who served as chair of AIMA from September 2012. AIMA has also announced four new additions to the council – Robyn Grew, chief administrative officer and general counsel, Man Group; Han Ming Ho, partner, Sidley Austin; Ryan Taylor, partner and global head of compliance, Brevan Howard Asset Management; and Michael Weinberg, senior managing director, chief investment strategist, Protégé Partners.
Alpha Quest: Navigating the Storm In many ways alpha seeking firms trading FX have endured something of a perfect storm of return reducing conditions over the past few years. Interest rate differentials are still largely non-existent as central banks persist with low interest rate policies. Many banks have pulled back from both principal risk taking and credit provision in FX, making life harder for their buy side counterparts. Regulations continue to take their toll on both buy and sell side firms, introducing new cost pressures and causing budgets to be increasingly diverted towards compliance functions.