Luxembourg, Luxembourg, August 13, 2011 --(PR.com
)-- Statistics released today by Sauer Capital S.A. show that Currency Overlay funds had mixed results in the Second quarter of 2011. During the quarter, excess returns ranged from 4.48% to -2.38%, and the overall median return was -0.01%.
However, Sauer Capital S.A. latest Currency Overlay Manager Profile Analysis for the quarter ending 30 June 2011 reveals that these managers did add value over one and three year periods, and funds achieved median excess returns of 0.40% and 0.07% p.a. respectively. Sauer Capital S.A. analysis shows that managers also added value over the longer term, and over five years to 30th June 2011, managers achieved an average outperformance of 0.21% p.a. Currency overlay managers were even more successful over a 10-year period and the median excess return was 0.30% p.a.
Funds are increasingly at risk from currency fluctuations due to rising investment in overseas assets, and the use of currency overlay managers allows pension schemes to hedge against these fluctuations in exchange rates. The impact of currency fluctuations was particularly notable during Q1 2011 when the US Dollar fell against both the euro and the yen, by 8.5% and 12.4% respectively.
Commenting on the results, Mikael Silte, Senior Technical Specialist, said: "During the second quarter, Dynamic managers were poor performers with a mean return of -0.5%; however this was offset by a strong performance from Technical managers. Asian managers were predictably strong performers during Q2 2011, whilst overall weakness was as a result of negative performances from Europe, the UK and US currency managers."
The use of currency overlay managers allows pension schemes to hedge against fluctuations in exchange rates. This means that where an investment performs well in local terms, but there has been an adverse movement in exchange rates, the scheme will still benefit from the investment performance. Over the last 10 years we have seen proportions in overseas equities rise from 18.7% to 25.5% and as a result, currency overlay strategies have become increasingly important.
Sauer Capital S.A. Currency Overlay Manager Profile Analysis includes accounts from 17 separate asset managers with a total asset value in excess of $16 billion. Each quarter, Sauer Capital S.A. publishes the results of this analysis and examines the overall excess returns achieved by active currency overlay managers against benchmark, across different styles, hedge ratios and base currencies. The results of this survey have now been published for the quarter ending 30 June 2011.
Sauer Capital (http://www.sauercapitalsa.com) Asset Servicing offers clients worldwide a broad spectrum of specialized asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services.
Sauer Capital S.A. is a financial services advisory company focused on helping clients manage and service their financial assets, servicing a worldwide client base and serving more than 100 markets. Sauer Capital S.A. is a leading provider of financial services for institutions, corporations and private individuals, offering superior investment management and investment services through a worldwide client-focused team. It offers fast execution through various types of accounts which are tailored to an individuals needs, both on an advisory or fully managed basis.