Toronto-based Invesco Canada Ltd. said Thrusday it would provide greater flexibility in currency hedging for the management team of Trimark Global Dividend Class and Trimark Global Fundamental Equity Fund/Class.

Effective October 3, the portfolio management team will have full flexibility to make currency-hedging decisions in order to decrease the foreign currency exposure of the funds. This broad latitude corresponds with the currency-hedging strategies of all other Trimark global and international funds.

“In today’s increasingly volatile currency market, we believe our investors are better served when our portfolio management team is able to make discretionary hedging decisions,” said Michael Hatcher, head of global equities and director of research, Trimark Investments. “The flexibility to make currency-hedging decisions better equips us to protect investors’ capital from adverse currency movements.”

In the past, the funds employed a fixed currency-hedging strategy. Under this strategy, the management team hedged approximately 50% of each fund’s exposure to five major currencies (U.S. dollar, Japanese yen, euro, British pound and Swiss franc) at all times.

Invesco says currency hedging will generally be employed for one of two reasons:

  • the team may hedge the Fund’s exposure to a foreign currency if they believe it is at risk of declining against the Canadian dollar; and
  • if the team believes that currency movements could have an adverse impact on the operations of a company held in the portfolio. For example, if a company’s expenses are denominated in one currency while the majority of its sales are in another currency, the team may try to hedge part of that currency risk within the portfolio.

The portfolio management team does not anticipate any immediate changes to its currency hedges in any of the funds.