Large US funds shrink exposure to top FX forward counterparties
Smaller managers increase top-dealer allocations as big beasts pull back
The largest US mutual and exchange-traded fund managers are increasingly dedicating less of their foreign exchange forwards books to their top counterparty, with six of the largest 10 FX forward-holding managers giving their main dealer a smaller proportion of volume in each of the past three years.
Based on quarterly filings made to the Securities and Exchange Commission, our analysis looked at annual averages of quarterly allocations for each manager as well as the average allocation large
More on Trading
Chinese corporates shunned hedging during tariff upheaval
High hedging costs and increasingly stable spot rate meant exporters opted not to add FX hedges as RMB rose
For variation margin payments, cash is no longer king
Dealers are being pressed to accept corporate bonds and even equities as collateral for non-cleared trades
BNP Paribas eyes selective algo white label tie-ups
The French bank struck its first FX algo white-labelling partnership with Lloyds
Will Taiwan lifers ramp up FX hedging amid tariff convulsions?
As TWD remains strong against the US dollar, Taiwanese life insurers are still poised to act
Macro traders tread carefully ahead of tariff pause deadline
Uncertainty has held buy-siders back from both hedging and directional trades
Hedge funds return to HKD carry trade after May stop-outs
Widened interest rate differentials spur investors to re-enter positions, but risks remain
Why asset owners aren’t turning their backs on America (yet)
Pension and sovereign wealth investors see US exceptionalism outlasting policy-driven turmoil
Limited-loss hedges help US firms dodge costly FX moves
Structurers say US corporates’ use of options-based net investment hedging helped soften impact of USD selloff
