APPROACH & PROCESS
1. The opportunity

Currency markets are different from asset markets in many important ways. They exist for different reasons, have a heterogeneous set of players with different information sets and objectives. This lack of homogeneity, coupled with a natural tendency towards globalisation, creates an opportunity for active management seen in no other asset class.

The opportunity
2. We are research-driven

Quantitative research is the building block of our whole process - of everything we do with Client assets.

We research and investigate strategies that make sense and have worked consistently over time – and can be expected to work in the future.

We place the 3 high hurdles of logic, evidence and rational expectation in front of all our position taking.

Our research across 32 currencies has been on going since 1989. Our approach today is better than yesterday and we are confident it will be better tomorrow as we adjust to the evolving world.

Research driven
3. Our approach to capturing the opportunity (3 Alpha Centres).

1. Observed differences in today’s fundamentals (e.g. favour higher yielding currencies).

2. Observed recent trends in currency (e.g. favour a currency that has appreciated).

3. Active future forecasting of fundamentals.

Approach
4. Our differentiator - actively future forecasting fundamentals

While a quantitative research driven model defines our approach and captures alpha in a disciplined and unemotional way, what differentiates us from other approaches is our 3rd Alpha Centre.

We look forward into the future by actively forecasting fundamentals daily.

We undertake this in a careful and controlled way. Up to 20% of our positions are based on our own in-house economic view (the sum of the strategy team members).

The outcome of this activity is simply added to the positions from the model, augmenting or offsetting.

This forecasting activity is NOT an override of the model or a supervisor of the model; it is a truly separate and independent source of return. It is non-corruptive.

Research driven