Focusing on developed-market foreign currency forwards
and short-duration fixed income securities, the fund seeks to generate returns with low correlation to major asset classes.
One-year Qatari riyal currency forwards
, which have been pushed up by the Syrian crisis, continued to climb on Tuesday, reaching 180.
This fuelled speculation in the currency forwards
market, which ultimately proved incorrect, that they might have to abandon their pegs.
The fund utilises currency forwards
with a directional bias in the “carry” component of the strategy.
Three-month onshore currency forwards
traded at 56.
The unit's chief investment officer, Guy Williams, said that the company was using credit-default swaps and currency forwards
to protect against losses in euro-denominated securities.
Saudi currency forwards
hit their weakest in two years on Tuesday as stocks tumbled and investors sought protection following widespread unrest in the Arab world.
Saudi stocks have suffered from the jitters, slipping to nine-month lows this week, while Saudi currency forwards
are near their weakest levels in two years.
In his new role, Underwood will be based in New York and will assume responsibility for currency forwards
and options during New York trading hours.
Traders, though, said Gulf currency forwards
were unlikely to go much higher in the short-term with resistance felt around current levels unless the regional political situation gets more dense.
Other Gulf currency forwards
are also pricing in larger appreciations after Central Bank Governor Sultan Nasser Al Suweidi's remarks in Tokyo.
Many simple derivatives, such as futures, options and currency forwards
, have been around for more than 20 years.