Foreign exchange

Foreign exchange is an asset class with particular characteristics. The asset class does not tie up any capital and neither is it expected to generate any long-term return. The value of a currency is affected by expected differences in the rate of inflation and short interest rates between currency regions. Foreign exchange emerges as an asset that provides sound diversification in relation to other asset classes, particularly equities.

Första AP-fonden’s foreign exchange management works both operationally and strategically. The strategic focus is to create a composition of currencies that is deemed to be appropriate in the long term based on a fundamental valuation principle.