Hedging programmes  | Passive hedging 

Institutional funds investing overseas are naturally exposed to currency risk, with the latter potentially having a detrimental impact on portfolio volatility without offering any compensation in term of returns.


Our FX risk mitigation strategies respond to the need to quantify, control and limit such adverse portfolio impacts.

 

Our service offering enables fund managers to:

  • Quantify FX risk in their portfolio

  • Run an efficiency review of the current hedging process

  • Risk control and portfolio rebalancing

  • Enhanced transparency through bespoke hedging reports and risk analytics. 

Outsourcing the hedging process to Audere helps to:

  • Streamline and improve our clients operational framework

  • Improve time management - enabling fund managers to focus on their core business. 

 

Hedging programmes  | Portfolio optimisation  

Many financial institutions implement static and incomplete risk management techniques, such as the use of partial discretionary hedge ratios for all exposures, to only hedging exposures with positive forward differential; to only hedging assets and currencies at specific ratios. 

These strategies miss the mark on minimizing the institution’s overall portfolio risk by failing to consider how each hedged exposure is correlated with other exposures

Audere has developed a quantitative approached to model Investment objectives and market conditions in order to define the unique set of hedging ratios that allow to:

 

  • Minimise hedging costs - per unit VaR/volatility reduction

  • Minimise Portfolio Volatility

  • Maximise Sharpe Ratio of the Portfolio

  • Minimise Cash Flows associated with the hedging strategy

  • Reduce Value at Risk.


 

Copyright © 2020 Audere Solutions Ltd, Inc. All Rights Reserved. Audere is Authorised & Regulated by the Financial Conduct Authority, registered No. 707835. Payment services for Audere Transfers  is provided by The Currency Cloud Ltd. The Currency Cloud Ltd is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 and the Payment Services Regulations for the issuing of electronic money and the provision of payment services with FCA register number 900199.

20 Old Bailey , London. 

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