FX hedging in equity portfolios is not a question of right or wrong. It is a series of trade-offs shaped by carry, governance, and indefinite holding periods. What works in the short term often fails over time – and the reasons are structural, not technical.
What was once plumbing is now capital.
Collateral increasingly determines liquidity resilience and realised performance in derivatives portfolios.
Tail hedging only works if convexity can be turned into cash when it matters. Governance, timing, and discipline determine whether protection becomes liquidity – or pointless drama.
Diversification works until liquidity disappears. When markets break, outcomes depend on whether convexity is turned into cash before it decays.
Practical thinking on the derivatives, hedging, portfolio and treasury decisions that matter in practice.