Investors are interested in the “carry” trade once again as central bank policies diverge, says Record Currency Management reporting its full-year results today.
The London-listed currency specialist signed up its first significant external investment in the Record FTSE FRB10 Index Fund, saying it was the culmination of interest in the carry trade. The carry trade is where currencies of countries with higher interest rates tend to outperform those with lower rates – a return pattern the FRB10 fund captures.
Neil Record, chairman of Record, says: “Interest in return-seeking opportunities, particularly carry opportunities, has begun to re-emerge, driven by the growing divergence of central banks’ policies.”
Record reports a 49% increase in assets under management “equivalence” (AUME) in dollar terms to $51.9 billion (€38.3 billion) at 31 March, 2014, and revenues of £19.9 million (€24.9 million), a 7% increase over the prior business year.
It is the first time in six years that AUME has exceeded $50 billion.
AUME is a term used by Record to reflect that its assets under management are notional rather than tangible.
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