UK - Pension funds are being offered a new multi-manager foreign exchange product as a way to get exposure to the asset class.
IFX Capital Markets' new IFX Multi-Manager Program uses a pool of six "hand-picked" managers, which will be made available for institutional and retail customers, the company says. The managers were not disclosed.
The move comes amid increasing interest in currency -certainly from UK local authorities, where there have been a lot of mandates tendered recently.
"The FX market has tried consistently for 20 years to develop FX as an asset class," said IFX's head of business development Kevin Gillespie.
"I think it has really only become one in the last five years. I would expect that most institutions and pension funds will have a currency programme as part of their alternative investment allocation."
The product requires a minimum investment of £10,000. IFX is targeting a net return of 8-10%.
It says using a pool of managers the product makes a wide range of market strategies available, which in turn lowers investors' risk exposure compared to fund of funds programmes with only one manager, IFX says. The pool will
continually be reviewed.
IFX estimates the daily trading volume in the foreign exchange markets to almost $2tn making it one of the most liquid and transparent markets offering an asset uncorrelated to equities and bonds.