Currency:
Currency Risk Management (CRM)

At Pareto we believe that the best way to add value in currency overlay management is by controlling risk of loss successfully. In a portfolio of overseas securities, this risk arises when translating the foreign currency exposures back into base currency. Foreign currency risk can be measured and can, therefore, be managed.

Accordingly, we do not attempt to forecast future currency returns. Instead, the focus is on estimating and managing the currency risk embedded in international investment portfolios.

To achieve a desirable asymmetry of returns we have developed a proprietary, statistical model-based approach known as Currency Risk Management (CRM). It is designed to generate the highest level of upside capture consistent with an uncompromising commitment to the control of risk of loss.