Python | Cedric Muller

Shares Classes Hedging

red and blue light streaks

red and blue light streaks

The Share class hedging is one of the solutions proposed to the investors for coverage against the risk of currency change, and there are several ways to do this, for example, options, FX forward, etc... but we are focusing on FX forward. This article will examine what share class hedging is and how it works. Then, there is a quick reminder of the regulations based on the opinion of the European Securities and Markets Authority. In the third point, we will see some concrete examples and lastly, how to calculate the share class performance, the implicit cost of hedging with a little Python, and what variables could influence the performance.