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Redefining FX Risk: Unleashing a Cutting Edge Approach

Redefining FX Risk: Unleashing a Cutting Edge Approach

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“Hedging against FX risk added a level of safety 
to our offshore investments.
We used Deaglo´s tools to help us lower costs and reduce
credit requirements, which has helped us to boost our returns.”

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Deputy Director

Vinicius Cunha

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Deaglo Customizes Solutions Enhancing Your Success

Deaglo is a leader in FX risk management technology

Next Generation FX Exposure Analysis

Flexible Strategy Builders

Strategy Simulation and Comparison

Depth-powered AI Strategy Reporting

Global FX Execution

Service Client Support

“Deaglo has been a great resource, helping us formulate the appropriate hedging strategies for existing and new deals. We are excited to use Deaglo's tools to help monitor existing
trade positions and ensure that liquidity risk is properly managed.”

President

Greg Racz

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  • Why do LP’s want a hedged share class?
    LP’s want a hedged share class in order to protect themselves from downside risk. By hedging their investment, LP’s can help ensure that their investment will not lose value if the market unexpectedly declines. In addition, hedging can also provide some protection against inflation.
  • Who should set up a Hedged Share Class?
    GPs are responsible for creating a Hedged Share Class when trying to raise capital from international investors.
  • What is the potential negative impact of the currency fluctuation on the fund performance?
    There are several potential negative impacts of currency fluctuations on fund performance. First, if a fund invests in securities denominated in foreign currencies, the value of those securities will rise and fall along with changes in the exchange rate. This means that the fund's performance will be affected by both the underlying performance of the securities and the currency fluctuations. Second, currency fluctuations can also affect the costs of investing in a foreign market. For example, if a fund incurs costs in a foreign currency but the value of that currency falls against the fund's home currency, then the fund's overall performance will be negatively impacted. Finally, currency fluctuations can also affect the ability of a fund to meet its investment objectives. For example, if a fund's objective is to generate income in a foreign currency but the currency fluctuates sharply, it may become difficult or impossible for the fund to achieve its objective.
  • What are the costs when creating a hedged share class?
    The cost to create a hedged share class is the cost of buying or selling the hedging instruments, plus the cost of any collateral required, minus any income from the hedging instruments.
  • Are Deaglo's multi-currency accounts free?
    Our multi-currency accounts are free to open and free to maintain. You will be notified of any and all fees before you are charged.
  • How do I get a multi-currency account for my business?
    If you apply online, Deaglo's onboarding team will reach out to finalize the onboarding process and collect all the necessary KYC to get your account up and running.
  • How much do I need to be transacting to warrant hedging?
    Its not about a number, its about how much does it affect your business. Can your business stomach a 15% loss on all earning due to a currency movement? if you can't, then hedging may be right for you.
  • When should I consider FX hedging?
    There are a number of factors to consider when deciding whether or not to hedge foreign exchange risk. Some of the key considerations include: - The amount of exposure: If your company has a large amount of foreign currency exposure, then it may be more prudent to hedge against exchange rate risk. - The time horizon: If you are planning on making foreign currency payments in the near future, then it may make sense to hedge in order to protect against potential adverse movements in the exchange rate. - The degree of uncertainty: If there is a great deal of uncertainty surrounding the future direction of the exchange rate, then hedging may help to mitigate some of that risk. - The cost of hedging: It is important to weigh the cost of hedging (e.g., the cost of options or forward contracts) against the potential benefits. Ultimately, the decision of whether or not to hedge FX risk is a strategic one that depends on the specific circumstances of the company.
  • How much of my currency exposure should I hedge?
    There is no one-size-fits-all answer to this question, as the amount of currency exposure you should hedge will depend on your individual circumstances and investment objectives. However, as a general rule of thumb, it is typically advisable to hedge a portion of your currency exposure when investing in foreign markets. There are a number of factors to consider when determining how much currency exposure to hedge, including your investment time horizon, your tolerance for volatility, and your overall investment strategy. For example, if you have a long-term investment horizon and are comfortable with some volatility, you may choose to hedge a smaller portion of your exposure. On the other hand, if you have a shorter-term investment horizon or are less tolerant of volatility, you may choose to hedge a larger portion of your exposure. Ultimately, the decision of how much currency exposure to hedge is up to you, and will depend on your specific situation and investment objectives. However, it is important to remember that hedging is not without risk, and you should always consult with an expert to ensure that hedging is appropriate for your portfolio.
  • How can I obtain better trading terms for my international transactions?
    Most counterparties base the trading fees they offer according to the volume of your transactions. This can be disadvantageous for individual traders who don't have a large volume of transactions. However, at Deaglo we negotiate with different brokers based on the total volume of all our clients. This allows us to obtain up to 70% better trading terms than what the general market offers.
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