A recent Fortune article discusses diversifying with currencies, in an interview with a portfolio manager. We agree with a lot of his points, although rather than maintaining a strategic allocation to currencies all the time, we think it can be fruitful to tactically allocate to currencies when they are strong. The larger point is that currencies have valuable characteristics for diversification-they have very different volatility from many other asset classes and they often operate on a different cycle from other assets. For these reasons, we explicitly chose to include currencies among our asset baskets for the Systematic RS Global Macro portfolio and the Arrow DWA Tactical Fund. Currencies just don’t tend to be thought about by U.S. investors, but that makes them no less valuable.
Click here to visit ArrowFunds.com for a prospectus & disclosures. Click here for disclosures from Dorsey Wright Money Management.
