Active Currency Hedging Strategies for Global Equity Portfolios.
The article presents a study that investigates the active currency hedging strategies used for international equity portfolio optimization. According to the author, international investment institutions maintain a diverse currency hedging benchmark without considering risk aversion and hedging ratio. It provides information on different currency hedging benchmarks and strategies used by various financial institutions as well as performance measures, including selective strategy, unhedged benchmark and exchange rates. The author reveals that currency hedging is a decision where behavioral models are applicable and mandates are disseminated in accordance with hedging policies.