As Portfolio Manager, Treasury Group Investment Services Limited (TIS) advises Premium on the best policy for managing the currency exposure in its portfolio.

TIS believes the approach to currency hedging should depend on the currency in which the investments are made.

Equity exposures in the major global currencies are substantially hedged. By hedging exposure to the larger international markets, TIS believes the portfolio is immunised against the significant volatility that can result from movements in the exchange rate.

In the case of smaller markets and currencies, TIS will take a strategic view on the currency before determining a hedging policy. Currently TIS assesses the Asian currencies to be undervalued and has determined it is in the best interest of the portfolio over the medium to long term to leave these currencies unhedged.

Currency hedging is implemented through the individual investment managers appointed by TIS.