AUSCOAL Super has joined the growing number of funds adopting a dynamic active currency management program.
State Street Global Advisors is to manage a dynamic currency hedging strategy for AUSCOAL Super’s $1.6 billion international equities portfolio, after it ran a passive overlay for the fund for the past seven years.
Michael Berry, senior portfolio manager at AUSCOAL Super, said its currency exposure would now be managed in a more creative and a dynamic way through the business cycle.
The move is being undertaken not only to maximize returns, but to diversify the portfolio.
NAB’s Superannuation FX Survey 2013 found 79 per cent of respondents take a passive approach to currency hedging, but the trend to active is increasing. Frontier Advisors are supportive of active hedging for its larger clients as its research shows that it enhances returns on an after-fee basis.