Currency-only hedge funds were once a hot corner of the investment world. From 2000 to 2008 the tally of currency funds tracked by the BarclayHedge Currency Traders Index almost tripled, to 145. Now they’re looking more like an endangered species, with just 49 in operation.
Managers who try to play trends in foreign-exchange rates—swapping dollars for pesos or euros for yen—have been victims of a long run of relative calm in financial markets. “In traditional asset classes, volatility is a bad thing,” says Peter Jacobson, co-founder of Rhicon Currency Management Pte. Not so in currency. If not much is changing in the relative fortunes of different countries, and in the value of their currencies, there are fewer ways to profit.
add a comment
