How to invest in currencies

Joanna Faith reports on the benefits and risks of investing in currency funds

Retail investors have traditionally shied away from investing in currency funds. But this is starting to change thanks to greater transparency, stronger risk management frameworks, market liquidity and the launch of several Ucits-compliant funds. Active managers generate returns by exploiting the inefficiencies that exist in the currency market. Currencies are arguably the most liquid asset class, with nearly $32trn traded daily, according to Investec. But the market still remains inefficient, says the group’s head of currency management, Thanos Papasavvas. “This is primarily due t...