Multicurrency Plus Strategy 1st Quarter 2008
During the first three months of 2008, the U.S. dollar fell sharply as the deteriorating housing market, a domestic credit market crisis, and falling domestic equity prices all contributed to a flight of capital away from the greenback. An aggressive easing campaign by the Federal Reserve to stabilize markets and the economy only reduced support for the dollar.
We have long offered that currencies should be viewed as an asset class and that an allocation to high quality currencies should be included in an investor’s portfolio as a prudent diversification measure. The three month period ending March 31st was an instructive reminder of this point. While many asset classes and sectors experienced negative returns, the Samson Multicurrency Plus Strategy, achieved healthy returns and considerable outperformance versus the calculated inverse of the USDX®. Our active currency selection process played a critical role in outperformance versus the benchmark and accounted for most of our excess returns.