What are the Risks of Investing in Hedged Share Classes?

Venue: MUFG Investor Services | 50 Raffles Place, #25-06 Singapore Land Tower, Singapore 048623

Event Details

Investing in hedged share classes involves specific risks and may not be appropriate for all investors. Hedged share classes aim to minimize the impact of currency fluctuations on investment returns, but it’s not always possible to perfectly match the hedge to the asset’s exposure.

We are delighted to welcome MUFG Investors Services to speak to our members on the key factors in deciding whether to set up a currency share class and the considerations a fund manager has to balance with increased attractiveness to global investors with the cost and complexity of setting up and managing a currency share class. Fund Managers typically follow 3 steps in designing the FX hedging approach of a currency share class before weighing it against the potential benefit of attracting global sponsors and MUFG will walk us through the following:

• Assess the costs of managing a currency share class
  • Interest rate differential
  • Transaction costs
  • Collateral drag
• Calibrate the hedge ratio of a currency share
  • Investment Holding Period
  • Underlying Asset Exposure
  • Market Volatility
• Set the FX forward tenor (or roll frequency)

Agenda

08:30 – 09:00
Registration & Light Breakfast

09:00 – 09:45
Briefing
Yogesh Chhabra and Tom Stephens

09:45 – 10:00
Q&A

10:00 – 10:30
Networking and Refreshments

Speakers

Yogesh Chhabra
Managing Director, FX Services of MUFG Investor Services
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Tom Stephens
Managing Director, Business Development of MUFG Investor Services 
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