Tilney Bestinvest: Currency not positioning will define returns next year

With currency moves increasingly dominating financial headlines, Tilney Bestinvest's CIO has predicted hedging, not asset allocation, will be the key differentiator for investor returns next year.

Lewis, chief investment officer at Tilney Bestinvest, said currency positioning will have a bigger impact on investment returns than asset allocation in the year ahead as equity markets themselves remain relatively correlated. There have been a number of unusual currency moves during 2014, and managers have been grappling with the impact on portfolios throughout the year. Strengthening sterling weakened overseas profits of FTSE-listed companies, the weak yen has put pressure on China’s renminbi, and some managers are concerned the strong dollar indicates bad news ahead.  More recen...