29 January 2017 By Oksana Patron
BetaShares has launched two new hedge funds which will provide long exposure to the change in the value between the Australian and the US dollar, and would help investors mitigate currency risks.
The BetaShares Strong Australian Dollar Fund, which would provide investors with a "magnified long AUD exposure" to the changes in the value of the Australian dollar relative to the US dollar, would be aimed at Australian financial advisers and investors to help them mitigate or hedge currency risk commonly affecting Australian investor returns from international US dollar denominated investments.
On the other hand, the BetaShares Strong US Dollar Fund was designed to provide investors with a "magnified long US exposure" to the performance of the US dollar relative to the Australian dollar.
According to BetaShares' managing director, Alex Vynokur, Donald Trump's presidency brought to investors' attention the future of the AUD /USD currency pair.
"Under a Trump presidency, the future direction of the AUD v. the USD has been brought to the fore, with many investors interested in expressing their view in a capital-efficient manner or simply wishing to mitigate currency risk in existing portfolios," he said.
"While any form of gearing must be approached by investors with caution and as a component of an investor's overall portfolio, as it magnifies both gains and losses, we believe that AUDS and YANK will represent useful investment tools for Australian investors who are seeking to profit from, or protect against, volatility in the currency market."