Currency Management

Metzler Currency Management stands for many years of expertise in money matters. We advise institutional clients and companies on strategic currency management. We offer passive and active FX overlay concepts backed by expert support and thus provide our clients with tailor-made solutions to all currency management issues from a single source.

Efficient Currency Program

Passive currency management

Our Efficient Currency Program is a centralized currency management service. The objective is to implement a consistent hedging ratio for all currency holdings in a cost-efficient manner via a responsible specialist.

Advantages at a glance

Absolute transparency of all currency risks, contributions and costs
Leveraging economies of scale and netting across different asset classes
A professional trading desk reduces trading costs

Systematic Currency Overlay

Active currency management

Our Systematic Currency Overlay is a dynamic hedging strategy for managing foreign currency exposures. It aims to limit currency losses while exploiting opportunities to participate in positive exchange rate trends.

Advantages at a glance

Systematic decision-making process for tactical adjusting of the hedging ratio
Risk-adjusted excess returns from existing foreign currency positions
Reduction of liquidity costs for a forex hedge

FX Protectec Carry

Investing in high-yield currencies

FX Protected Carry is a systematic investment strategy in different currency areas. The aim is to collect risk-adjusted excess returns via higher interest rates compared to the euro zone. Positioning is performed via forward exchange transactions and is actively managed.

Advantages at a glance

Attractive risk premia (interest advantages) for high-yield currencies
Negative correlation to the equity market in difficult times
Low duration, liquidity and credit risk

The strategy was launched in March of 2017 as a mutual fund (UCITS) ART Metzler FX Protected Carry. The portfolio management company is Universal Investment GmbH:

Share class I

FX Protected Carry can also be described as a speical AIF or a managed account.

Strategic advisory services

Defining a hedging policy

We use a strategic currency risk allocator (SCRA) to help investors design their SAA. The aim is to find the ideal hedging policy, taking all assets (underlying investments and currencies) as well as client specifications and regulatory requirements into account.

Advantages at a glance

A scientifically-based, holistic approach with clearly defined processes and rules for FX analysis
Based on the relevant benchmark indices and the client’s own risk appetite
The ideal hedging policy can be found in the proper balance between risk, hedging costs and cash flows

Metzler FX Protected Carry – our favorites for 2023!

7.2.2023

Metzler wins currency overlay mandate for a major Japanese pension fund

16.3.2022

Metzler Capital Markets is Currency Manager of the Year 2020

14.12.2020

In 2020, Metzler Capital Markets was named “Currency Manager of the Year” at the 13th annual “European Pensions Awards” ceremony in London. The event honors investment firms, consultants and service providers from all over Europe who have set professional standards in order to best serve European pension funds in times of increasingly challenging market conditions. This is the second time Metzler Capital Markets has won this award since 2017.

Please read more about the Award Currency Manager of the Year.

Metzler Asset Management offers risk overlay strategies for investors seeking dynamic risk management beyond currency management. A disciplined and systematic risk management allows managing complex portfolios with a variety of asset classes efficiently and performance oriented.