A stronger dollar has negatively affected returns and increased operational costs for 83% of fund managers
79% of fund managers are now hedging forecastable currency risk, with average hedge ratios and tenors increasing.
A report highlights growing concerns among North American
fund managers about foreign exchange (FX) volatility. The report, titled the
MillTechFX North American Fund Manager CFO FX Report 2024, reveals significant
shifts in hedging strategies due to current market conditions and upcoming US
elections.
Fund Managers Extend Hedging
The study, which surveyed 250 senior finance
decision-makers, found that 65% of fund managers plan to extend their hedge
tenor. This move will provide protection for a longer period against FX
volatility. Additionally, 34% of respondents intend to increase their hedge
ratio, aiming to shield a greater portion of their exposure from market
fluctuations.
The report notes that North American fund managers are
grappling with the impact of a stronger dollar. A substantial 83% of
respondents reported that their returns have been negatively affected by the
strong dollar.
Operational costs have also risen for 81% of fund managers, with
34% experiencing a significant increase. Nearly all 93% are concerned about
how the stronger dollar affects their foreign market exposure, with 46%
expressing significant concern.
Research shows that the impact of election-related
developments on the US dollar is a primary concern for North American fund
managers, who are adopting strategies to safeguard their returns. The main
concerns include increased volatility 40%, policy changes affecting currency
values 37%, and unpredictable market movements 37%.
CEOs are particularly focused on policy changes and
counterparty risk in hedging transactions. Consequently, many fund managers are
adjusting their hedging strategies, with 65% planning to extend their hedge
tenors to enhance protection against volatility.
Eric Huttman, CEO of MillTechFX commented: “It’s a
fascinating time in the FX market in North America with the greenback
strengthening, despite analysts predicting its value would drop in 2024 coupled
with a highly charged US presidential election campaign which will likely move
markets."
"It’s clear that fund managers are concerned about the potential FX
ramifications, with many adopting a more proactive approach, protecting more of
their currency exposures for longer as they seek to secure certainty in a climate
that is anything but certain.”
Hedge Ratio Increases to 55%
To address these challenges, 79% of fund managers are now
hedging their forecastable currency risk, up from 72% in 2023. The average
hedge ratio has risen to 55%, compared to 50% last year, and the average hedge
tenor has increased to 5.41 months from 4.96 months. Despite these adjustments,
80% of fund managers have noted an increase in the cost of hedging over the
past year.
The report also reveals trends in technology adoption and
operational changes. Nearly all (99%) of fund managers are exploring new
technologies, with a particular focus on process automation 41%.
Additionally, 31% are considering full FX workflow automation. However, a
significant number of fund managers continue to use manual methods for FX
operations, with 26% handling transactions via email and 24% using the phone.
T+1 Settlement Costs Rise
In anticipation of the move to T+1 settlement, fund managers
have made several adjustments. These include increasing staffing 45%,
improving communication with counterparties 43%, and upgrading IT systems
42%. Despite these preparations, 78% reported that the transition to T+1 has
led to higher operational costs.
“The other large shift in the market was on the operational
front, as market participants geared up for T+1. They increased staff and
overhauled IT systems, leading to increased costs and this investment ensured
the transition was smooth with CLS reporting that there has been no decrease in
processed volumes,” Huttman added.
Top FX Challenges Revealed
Finally, the report identifies key FX challenges and
priorities. The principal operational challenge is cost calculation 30%,
followed by onboarding liquidity providers 28% and securing credit lines
26%.
The top priority for fund managers is FX counterparty credit 36%, with
uncollateralized hedging coming in second 29%. This report underscores the
current volatility in FX markets and the strategic responses of North American
fund managers to mitigate risks and manage costs.
A report highlights growing concerns among North American
fund managers about foreign exchange (FX) volatility. The report, titled the
MillTechFX North American Fund Manager CFO FX Report 2024, reveals significant
shifts in hedging strategies due to current market conditions and upcoming US
elections.
Fund Managers Extend Hedging
The study, which surveyed 250 senior finance
decision-makers, found that 65% of fund managers plan to extend their hedge
tenor. This move will provide protection for a longer period against FX
volatility. Additionally, 34% of respondents intend to increase their hedge
ratio, aiming to shield a greater portion of their exposure from market
fluctuations.
The report notes that North American fund managers are
grappling with the impact of a stronger dollar. A substantial 83% of
respondents reported that their returns have been negatively affected by the
strong dollar.
Operational costs have also risen for 81% of fund managers, with
34% experiencing a significant increase. Nearly all 93% are concerned about
how the stronger dollar affects their foreign market exposure, with 46%
expressing significant concern.
Research shows that the impact of election-related
developments on the US dollar is a primary concern for North American fund
managers, who are adopting strategies to safeguard their returns. The main
concerns include increased volatility 40%, policy changes affecting currency
values 37%, and unpredictable market movements 37%.
CEOs are particularly focused on policy changes and
counterparty risk in hedging transactions. Consequently, many fund managers are
adjusting their hedging strategies, with 65% planning to extend their hedge
tenors to enhance protection against volatility.
Eric Huttman, CEO of MillTechFX commented: “It’s a
fascinating time in the FX market in North America with the greenback
strengthening, despite analysts predicting its value would drop in 2024 coupled
with a highly charged US presidential election campaign which will likely move
markets."
"It’s clear that fund managers are concerned about the potential FX
ramifications, with many adopting a more proactive approach, protecting more of
their currency exposures for longer as they seek to secure certainty in a climate
that is anything but certain.”
Hedge Ratio Increases to 55%
To address these challenges, 79% of fund managers are now
hedging their forecastable currency risk, up from 72% in 2023. The average
hedge ratio has risen to 55%, compared to 50% last year, and the average hedge
tenor has increased to 5.41 months from 4.96 months. Despite these adjustments,
80% of fund managers have noted an increase in the cost of hedging over the
past year.
The report also reveals trends in technology adoption and
operational changes. Nearly all (99%) of fund managers are exploring new
technologies, with a particular focus on process automation 41%.
Additionally, 31% are considering full FX workflow automation. However, a
significant number of fund managers continue to use manual methods for FX
operations, with 26% handling transactions via email and 24% using the phone.
T+1 Settlement Costs Rise
In anticipation of the move to T+1 settlement, fund managers
have made several adjustments. These include increasing staffing 45%,
improving communication with counterparties 43%, and upgrading IT systems
42%. Despite these preparations, 78% reported that the transition to T+1 has
led to higher operational costs.
“The other large shift in the market was on the operational
front, as market participants geared up for T+1. They increased staff and
overhauled IT systems, leading to increased costs and this investment ensured
the transition was smooth with CLS reporting that there has been no decrease in
processed volumes,” Huttman added.
Top FX Challenges Revealed
Finally, the report identifies key FX challenges and
priorities. The principal operational challenge is cost calculation 30%,
followed by onboarding liquidity providers 28% and securing credit lines
26%.
The top priority for fund managers is FX counterparty credit 36%, with
uncollateralized hedging coming in second 29%. This report underscores the
current volatility in FX markets and the strategic responses of North American
fund managers to mitigate risks and manage costs.
6 Years After This FX/CFD Broker's Collapse, Its Ex-Director Pleads Guilty
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
Transformation in the APAC Trading Landscape and Beyond | FMPS:24
As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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As the financial services industry experiences rapid and transformative changes, leading fintech experts and policymakers come together to discuss the present and future of retail trading and the evolving regulatory landscape. Join this insightful session for a forward-looking perspective on the trends, innovations, and trader needs that are shaping the future of offerings on a global scale.
Speakers:
Eric Blewitt, CEO, Investment Trends
Rhys Bollen, Senior Executive Leader, Digital Assets, Australian Securities and Investments Commission (ASIC)
Michael Bogoevski, Head of Institutional Sales, CMC Connect
Karin Setchell, General Manager, Product & Investing Solutions, CommSec
#fmps #fmps24 #fmevents #RetailTrading #FintechInnovation #FinancialRegulation #DigitalAssets #GlobalFinance
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
Executive Interviews with Joe Li & Simon Naish | ATFX | FMPS:24
In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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In this Finance Magnates Executive Interview, Joe Li, Chairman at ATFX and Simon Naish, Country Head of Australia at ATFX Connect, discuss ATFX’s strategic growth in the APAC region, particularly focusing on their institutional arm, ATFX Connect. They highlight the importance of Australia as a strategic hub, the challenges of operating in a highly competitive and regulated market, and their plans for regional expansion across APAC. The conversation touches on the integration of advanced technology and multi-asset offerings, the significance of optimal execution tools, and the importance of tailoring solutions to meet the sophisticated demands of institutional clients. They also emphasize their strong regulatory compliance and their commitment to enhancing client experience through innovative tools and infrastructure.
#fmps #fmps24 #fmevents #ATFXConnect #APACFinance #InstitutionalTrading #FinancialTechnology #MarketExpansion
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
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Ready to Scale? Regtech in Australia, A Global View | FMPS:24
Ready to Scale? Regtech in Australia, A Global View | FMPS:24
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
In the effort to elevate Australian fintech on the global stage, RegTech presents a unique and compelling case. Despite the increasing demand for robust compliance solutions, Australia's RegTech sector—ranked third-largest globally—remains underfunded. Join this insightful fireside chat to explore the future of Australia’s RegTech hub and its global potential.
Key discussion points include uncovering the hidden opportunities in RegTech that VCs are overlooking, the necessary steps for increased governmental support, the readiness of the local ecosystem to collaborate across global regulatory regimes, and lessons learned from other leading fintech hubs around the world.
Speakers:
Dickie Currer, National Lead, Tech Australia Advocates
Deborah Young, CEO, The RegTech Association
#fmps #fmps24 #fmevents #RegTech #Fintech #AustralianFintech #GlobalCompliance #TechInnovation
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
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Resilience in Trading: From Third Class To World Class | FMPS:24
Resilience in Trading: From Third Class To World Class | FMPS:24
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
📸 Instagram: https://www.instagram.com/fmevents_official
🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
Subscribe to our YouTube channel for more!
Join Mario Singh, Founder and Chairman of Fullerton Markets, as he shares his life story, highlighting the traits that were required starting without financial knowledge to become a financial and trading expert recognised by world-renowned media like CNBC & Bloomberg.
#fmps #fmps24 #fmevents #trading #onlinetrading #tradingexpert #tradingjourney
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates.
Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
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IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
IBs and Brokers: The Good, The Bad, The Ugly | FMPS:24
For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
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🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
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▶️ YouTube: https://www.youtube.com/@FinanceMagnates_official
Don't miss out on our latest videos, interviews, and event coverage.
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For most brokers, IBs and trading educators are invaluable partners, driving highly targeted traffic from key regions. However, without proper management, these relationships can quickly turn sour. In this session, gain an insider’s perspective on the types of licenses IBs need in APAC, the crucial details in IB agreements that both parties must scrutinize, common disputes between IBs and brokers and effective resolutions, and the pros and cons of transitioning from IB to broker.
Speakers:
Melody Gao, Senior Lawyer, Sophie Grace
James Perry-Keene, Head of Strategic Partnerships, Pepperstone
Christopher Balanzategui, CEO, N3tworx
#fmps #fmps24 #fmevents #IBAgreements #BrokerPartnerships #TradingIndustry #APACFinance #FinancialRegulation
📣 Stay updated with the latest in finance and trading!
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👍 Facebook: https://www.facebook.com/FinanceMagnatesEvents
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🐦 Twitter: https://twitter.com/F_M_events
🎥 TikTok: https://www.tiktok.com/@fmevents_official
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