Transactions in the foreign exchange markets are driven by varying motivations, many of them not by profit motives and can shift short-term market volatility and affect valuations. An active trading strategy aims to exploit these market inefficiencies in order to seek excess returns.
We help clients maximise returns across varying market conditions. Our active strategy exploits diverging expectations among market participants. Because no universally acknowledged valuation methodology exists to assess fair value for a currency. This lack of consensus on valuation creates a market inefficiency that we seek to exploit to add value.
Robust risk management
Our trading approach is risk-adjusted return-driven. This means that rigorous risk management processes are key in demonstrating the viability of the trading approach and in delivering superior returns through all types of economic conditions. Our systems and processes aim to exploit volatility in our favour and reduce exposures to unnecessary downside.
Our strategy can be tailored to clients’ risk and return goals. This approach can be implemented as an absolute return strategy or an unfunded overlay strategy, where exposures could be obtained with low levels of invested capital. Return and volatility targets as well as leverage can be customised to meet each investor’s needs.
How do we achieve this?
Our trading ideas are expressed through solid strategies that combine quantitative, qualitative and technical methods:
Top-down approach focuses on global macroeconomic fundamentals and incorporates analysis of relative interest rates, inflation rates, real exchange rates, monetary and fiscal policies, trade account balance and current account balance, among other factors.
Bottom-up approach focuses on gaining exposure to structural currency beta by exploiting the price volatility, or the yield spread between currencies.
Technical approach focuses on supply and demand forces and market sentiment as reflected in the price movements to identify trading opportunities in price trends and patterns.