New Star's Adderson hedges volatility with derivatives in Euro bank holdings

New Star Global Financials fund manager Emily Adderson has initiated a derivative position to hedge out the market volatility on the vehicle's European bank holdings.

Adderson introduced the European bank futures contract in early February when Greece’s debt problems ignited similar concerns for other nations on the Continent – namely Spain and Portugal. The overlay equated to 7.1% of the £100m Global Financials fund at end February and remains in place. “It was a position we took on when sovereign risk was a real key concern, which I believe has not gone away just yet. “We have not yet had a full resolution on Greece,” she says. “This was put in place to remove volatility risk from our holdings. We are happy with the holdings we have, but we...