Architas is considering introducing funds with hedged share classes into its multi-manager range as concerns about the eurozone’s stability mount.
The firm runs six multi-manager funds, totalling £478m, and does not currently use any funds with hedged share classes.
Chief investment officer Caspar Rock says: “We have exposure to the euro through equities and we have got to ask, is the euro going to weaken? We are considering buying funds with hedged share classes.”
Global markets fell this week amid rising eurozone concerns. There are worries that both Italy and Spain may seek a bailout from the European Union and the International Monetary Fund. Concerns about Italy are rising as the government continues with plans for an austerity budget to reduce its public deficit.
This week, European leaders acknowledged that Greece may be about to default on its debt burden.
Rock says the EU may be prep-aring something similar to the US’s troubled asset relief program, under which the Treasury could buy illiquid assets from banks and other financial institutions, allowing them to stabilise their balance sheets.
He says: “I think that the eurozone is preparing something like Tarp. The market thinks this will happen in 2013 but I believe that it is got to happen more quickly than that. It would not surprise me if a facility was set up to buy lots of distressed Greek debt.”