Written by Paul Holmes
As Hedge Funds have chased the more exotic investments recently to generate their close on break even positions year on year (assuming you count front running in Apple stock as alternative investing), it remains a continual mystery to many (including the author) why many have not turned to the obvious investment of currencies. Is it not considered sexy enough, is it too ‘easy’, too obvious? This most liquid of markets, almost impossible to corner, with low transaction costs, where algo quants can indulge to their hearts’ delights, what’s not to like? Could SocGen’s initiative prove to be a catalyst for others to follow suit? Watch the space…
Société Générale Private Banking Hambros (SGPB Hambros) is finally ready to launch a dynamic growth portfolio, investing only in foreign exchange, following huge demand from its base of ultra-high net worth clients who have been looking to diversify their currency base.
Eric Verleyen, the chief investment officer of SGPB Hambros;
“We are looking at a more sophisticated strategy based on foreign exchange for wealthy high net worth customers because they consider forex an asset class in itself. Currencies is an area where we can take a dynamic approach to get results at a time when equities are not delivering that much. You can also look at currencies as security for the future. It’s an active structured product so you can change the underlying assets from time to time. It’s not just a list and we have to hold them”
He added that some clients are concerned with regards to the future valuation of their main currency holdings and as a consequence are keen to diversify their exposures. Favoured currencies likely to feature in the portfolio will include Yen, the Norwegian krone with Australian, Canadian and Singaporean dollars.
Eric has also been working on a number of new products since taking on the CIO role in December 2011, an oil and gas-focused structured product, aimed once again towards its high net worth individual client base, is also set to launch in 2012.