U.S., Canadian funds are hedging FX risks by most in three years

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomeFinanceNewsU.S., Canadian funds are hedging FX risks by most in three yearsThe data comes from a MillTech survey of 250 senior finance decision-makers — 158 in the U.S. and 92 in CanadaAuthor of the article:U.S. policy uncertainty went beyond foreign-exchange management and drove 98 per cent of respondents to delay investment decisions. Photo by Kevin Dietsch/Getty ImagesMoney managers in the United States and Canada are increasingly hedging their currency exposure due to risks from trade, central bank and Middle East policy.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountA survey of fund decision-makers by currency-hedging platform MillTech found that 94 per cent are hedging currency risk, the most since the the firm began tracking that three years ago.Roughly one-third cited U.S. trade policy and questions about monetary policy moves by the Federal Reserve and Bank of Canada. Geopolitical tensions in the Middle East followed at 31 per cent.“North American fund managers are being pulled in several directions at once,” said Eric Huttman, chief executive of MillTech, the execution and technology arm of currency manager Millennium Global Investments Ltd. “Trade tariffs, shifting central bank expectations and geopolitical tensions are making currency moves harder to predict and investment decisions harder to make.”Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againHedge ratios rose to 48 per cent from 45 per cent last year, with 35 per cent of funds planning to increase theirs further, according to MillTech. The increase comes after 97 per cent of funds experienced losses averaging US$731,000 during the first quarter from unhedged FX exposure due to geopolitical uncertainty, the firm said. Sixty-nine percent of those that don’t hedge are now considering it.The data comes from a MillTech survey of 250 senior finance decision-makers — 158 in the U.S. and 92 in Canada. The respondents represent firms with assets under management ranging from US$50 million to more than US$20 billion.Survey respondents reported the most common barriers to hedging were “burdensome” hedging infrastructure, a preference to deploy capital elsewhere and expenses, since hedging costs rose 57 per cent in the year leading up to June.MillTech also said U.S. policy uncertainty went beyond foreign-exchange management and drove 98 per cent of respondents to delay investment decisions.We apologize, but this video has failed to load.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.