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Currency Management

Bespoke, automated end-to-end solution strengthens oversight, eases administrative burden and supports distribution strategies.

Managing and mitigating volatility throughout the currency management life-cycle is central to successful performance outcomes. Asset managers and asset owners alike require increased levels of governance, oversight and transparency combined with the ability to respond quickly to market events.

Realize the benefits of working with Northern Trust to help you manage your entire foreign exchange process.


Helping to Reduce Risk
A non–discretionary principal execution model set to agreed client parameters.

Streamlining Complex Operational Processes
Innovative delegated product suite underpinned by a scalable integrated operating and technology model.

Active Monitoring
Actively monitoring against target hedge ratios and unrealized P&L views.

Enhanced Oversight
Sophisticated performance analytics and transparency, enabling you to make informed decisions.


Solutions to Meet Specific Requirements to Suit Your Investment Strategy

Share-Class Hedging
Aiding distribution strategies by hedging the fund’s non-base share class currency back to the fund’s base currency helping reduce divergence.

Unhedged Share Class Conversion
SPOT conversion from the share class currency into the fund’s base currency.

Portfolio Overlay
Hedging the portfolio’s non-base currency assets back to the fund’s base currency, mitigating currency exposure for international  assets.*^^

Look-Through Hedging
A combination of share-class hedging and portfolio overlay by hedging the fund’s asset currencies at the share class level.

*On an asset or index weighting basis. ^^ Non Deliverable Forward (NDF) or proxy hedging for restricted currencies

  

Multiple global macro events and inflationary pressures are presenting challenges for asset managers and asset owners alike to address FX currency risk in their international portfolios. Adopting an effective currency management programme through the use of nuanced hedging models and utilisation of new technologies may help alleviate some of these pressures and free up time to focus on alpha generation. Andy Lemon, Head of Currency Management for Northern Trust Capital Markets, shares insights with Funds Europe.

As firms strain to hedge currencies amid rising exposures and complexities, many are embracing an upgrade to customized outsourcing. But others are still falling behind.


This marketing communication is issued and approved for distribution in the United Kingdom and European Economic Area by The Northern Trust Company, London Branch (‘TNTC’) or Northern Trust Global Services SE (‘NTGS SE’). TNTC is authorised and regulated by the Federal Reserve Board; authorised by the Prudential Regulation Authority; subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. NTGS SE is authorised by the European Central Bank and subject to the prudential supervision of the European Central Bank and the Luxembourg Commission de Surveillance du Secteur Financier. View full disclaimer.

Confidentiality Notice:  This communication is confidential, may be privileged, and is meant only for the intended recipient.  If you are not the intended recipient, please notify the sender as soon as possible.  All materials contained in this presentation, including the description of Northern Trust, its systems, processes and pricing methodology, are proprietary information of Northern Trust. In consideration of acceptance of these materials, the recipient agrees that it will keep all such materials strictly confidential and that it will not, without the prior written consent of Northern Trust, distribute such materials or any part thereof to any person outside the recipient’s organization or to any individual within the recipient’s organization who is not directly involved in reviewing this presentation, unless required to do so by applicable law.  If the recipient is a consultant acting on behalf of a third party client, the recipient may share such materials with its client if it includes a copy of these restrictions with such materials.  In such event, the client agrees to comply with these restrictions in consideration of its accepting such materials.

© 2022 Northern Trust Corporation. Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A. Incorporated with limited liability as an Illinois corporation under number 0014019. Products and services provided by subsidiaries of Northern Trust Corporation may vary in different markets and are offered in accordance with local regulation. This material is directed to professional clients only and is not intended for retail clients. For Asia-Pacific markets, it is directed to expert, institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients or investors. For legal and regulatory information about our offices and legal entities, visit northerntrust.com/disclosures. The following information is provided to comply with local disclosure requirements: The Northern Trust Company, London Branch, Northern Trust Global Investments Limited, Northern Trust Securities LLP and Northern Trust Investor Services Limited, 50 Bank Street, London E14 5NT. Northern Trust Global Services SE, 10 rue du Château d’Eau, L-3364 Leudelange, Grand-Duché de Luxembourg, incorporated with limited liability in Luxembourg at the RCS under number B232281; Northern Trust Global Services SE UK Branch, 50 Bank Street, London E14 5NT; Northern Trust Global Services SE Sweden Bankfilial, Ingmar Bergmans gata 4, 1st Floor, 114 34 Stockholm, Sweden; Northern Trust Global Services SE Netherlands Branch, Viñoly 7th floor, Claude Debussylaan 18 A, 1082 MD Amsterdam; Northern Trust Global Services SE Abu Dhabi Branch, registration Number 000000519 licenced by ADGM under FSRA #160018; Northern Trust Global Services SE Norway Branch, 3rd Floor, Haakon VII's Gate 6, 0161 Oslo, Norway; Northern Trust Global Services SE, Leudelange, Luxembourg, Zweigniederlassung Basel is a branch of Northern Trust Global Services SE (itself authorised by the ECB and subject to the prudential supervision of the ECB and the CSSF). The Branch has its registered office at Grosspeter Tower, Grosspeteranlage 29, 4052 Basel, Switzerland, and is authorised and regulated by the Swiss Financial Market Supervisory Authority FINMA. The Northern Trust Company Saudi Arabia, PO Box 7508, Level 20, Kingdom Tower, Al Urubah Road, Olaya District, Riyadh, Kingdom of Saudi Arabia 11214-9597, a Saudi Joint Stock Company – capital 52 million SAR. Regulated and Authorised by the Capital Market Authority License #12163-26 CR 1010366439. Northern Trust (Guernsey) Limited (2651)/Northern Trust Fiduciary Services (Guernsey) Limited (29806)/Northern Trust International Fund Administration Services (Guernsey) Limited (15532) Registered Office: Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3DA. Northern Trust International Fund Administration Services (Ireland) Limited (160579)/Northern Trust Fiduciary Services (Ireland) Limited (161386),  Registered Office: Georges Court, 54-62 Townsend Street, Dublin 2, D02 R156, Ireland.

Capital Markets | Global Foreign Exchange Solutions

We provide a range of liquidity, trading and outsourced foreign exchange solutions underpinned by sophisticated technology that is designed to provide speed, efficiency, transparency and optimum execution within a robust risk framework.