Amidst Significant FX Volatility, Pension Fund CIOs Eye Opportunities in Currency Management
LONDON, Oct. 13, 2015 /PRNewswire/ -- A surge in the US dollar has cost the $22 trillion dollar US pension fund market nearly $1 trillion dollars in assets from July 2014 to end of March this year. With FX volatility not simmering anytime soon, CIOs are increasingly recognizing that currency management is an integral part of asset management. Many are looking at managing risk, while others are looking at the alpha opportunities.
UK-based currency overlay manager Millennium Global Investments, Ltd., with an AUM of $13.9 billion at end June 2015, has recently been awarded an additional $2.1 billion of currency mandates which are all expected to be funded by the year end. Of this, 50% of new assets pertain to US pensions.
Through June 30th of this year, currency overlay managers have seen net inflows of $3.6 billion as opposed to year-end '14 net outflows of $682.2 million, according to eVestment.
"CIOs in the camp of riding out currency volatility are having a change of heart due to a myriad of factors – a strengthening dollar, a gradual depreciation of the yuan, the ECB considering additional stimulus, and a US Fed rate hike looming," said Mark Astley, chief executive officer of Millennium Global Investments, Ltd.
Mr. Astley added that after years of monetary policy convergence, policy in the US and the UK are diverging from those in Europe, China and Japan, which remain accommodative against a backdrop of further slowdown or disinflation. This divergence is creating an environment in which currencies can no longer be ignored and CIOs are considering both addressing the risk inherent in holding international assets and the return potential available from exploiting currency trends.
About Millennium Global Investments. Ltd.
Founded in 1994, we are an independent institutional asset manager based in London servicing institutional clients around the globe. Learn more about us at www.millenniumglobal.com.
Press Contact:
Phil Nourie / 212-922-1226
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SOURCE Millennium Global Investments, Ltd.
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