Introduction

3DCM offers investors access to the world of foreign exchange through active asset management. The use of FX can help to increase portfolio diversification using an asset class that is non correlated to some of the more traditional investment vehicles.

The currency overlay and currency hedge fund industry has expanded in recent years but the share of global investment portfolios allocated to currency is still relatively small and presents an opportunity for significant further growth, especially in the retail sector.

Advantages of Foreign Exchange investment

• Foreign exchange is not an absolute asset, meaning currencies can never become saturated or uniformly overvalued. As one currency goes up in value, its counterpart goes down in tandem. There is always fundamental value in at least half of all currencies available.
• FX not correlated with other asset classes, making it an essential diversification tool for investment portfolios.
• Foreign exchange markets are the largest and most liquid in world, operating continuously through time. Somewhere around the world a financial centre is open for business and banks and other institutions exchange currencies 24/7, only stopping briefly at the weekend. This gives traders the opportunity to exploit global economic events in real time and makes the liquidation of currency investments easier and cheaper than in any other asset class.
• Pricing is completely transparent.
• Currency investments also don't always need to be funded, which makes them a potentially opportunity-cost-free source of return. This is a principle around which the currency overlay and the managed currency mortgage industries are based.