Schroders rolls out 'world cash fund'

Schroders launched its first managed currency fund, Schroder ISF Global Managed Currency, to the retail market last week to be managed by industry veteran Clive Dennis.

The actively managed fund will invest in currencies around the world, including emerging market currencies, giving it a wider remit than a number of its peer funds, the company said.

The fund aims to outperform the Global Currency index - created by JPMorgan and containing more than 30 different currencies - by targeting an excess return of 3 per cent per year.

Mr Dennis described the fund as a "world cash fund", adding: “We wanted to ensure our fund has the flexibility to invest in any currency in the world and to be able to move to where we see the very best opportunities."

The manager, who has more than 22 years' investment experience of managing currencies, will be supported by Schroders' emerging market debt team and work closely with the company's specialists from around the world.

Robin Stoakley, head of UK retail at Schroders, said investors who had traditionally held cash deposits were no longer finding them attractive because of low interest rates and the threat of inflation.

He said the fund would offer an alternative to cash deposits and government bonds, offering a higher yield and potential capital gains.

"A lot of currency funds will only invest in the currencies of the G10 group of countries," he added. "This fund will be able to invest in all currencies around the world, where we see the best opportunities."

Christopher Wyke, currencies product manager at Schroders, said the new fund should be considered in the same way many global bond and equity funds were now seen.

"We diversify equities and bonds - we should do the same with cash," he said. "A lot of people hoarding their money on deposit are getting low yield and reducing their global purchasing power.

"Currency is a safer way of playing the rise in markets, as there is no such thing as a bear market for currencies."

The new fund will offer investors something different to the products currently on the market, Mr Wyke said.

"Although there are some global currency funds, these are either hedge funds or hedged products designed to reduce risks."

Meera Patel, senior fund analyst at Hargreaves Lansdown, said although currency volatility would remain a concern, the fund would appeal to investors seeking diversification.

"Given the importance of global currencies in recent years, there could be long-term growth to capture from this portfolio if the manager makes the right calls."