BCFS brings together a multi-disciplinary team with depth and breadth of experience in structuring, trading, investment management, accounting and regulatory and legal requirements. We have global reach through our investment professionals based in London, New York, Tokyo, Singapore and Sydney.
Our investment philosophy is to continuously improve upon established ideas and flexibly adapt to changing market dynamics. We have integrated our business and infrastructure platforms to enable a cross-border approach that is unique in investment management. The team focuses on four distinct yet harmonised functions:
Fund Structuring works with clients to define, develop and execute customised solutions
Fund Management is responsible for the asset and risk management of each fund in accordance with its objectives, investment policies and regulatory guidelines
Portfolio Engineering creates investment strategies and methodologies in accordance with our investment philosophy, with a focus on asset class neutral models and performance consistency
Trading manages the re-balancing, risk exposure and execution of portfolios in a way that enhances alpha generation and reduces transaction impact on the strategy returns
Sunday, June 7, 2009
Key Attributes
Since launch of the first fund in January 2006, BCFS has:
Attracted leading investors, establishing a significant fund business and market leadership in applied investment innovation
Established a diverse client base from insurance companies, asset managers and corporate treasuries to family offices and private banking investors
Provided exposure to multiple asset classes including equities, commodities, interest rates, foreign exchange, fixed income, emerging markets, hedge funds and property
Grown assets under management to more than USD 6bn* in structured and quantitative strategies and manages more than 70 funds
Built a global footprint with funds distributed throughout South America, Europe and Asia Pacific
Increased its strong front- to back-office team to 70
*as of 30 June 2008
Attracted leading investors, establishing a significant fund business and market leadership in applied investment innovation
Established a diverse client base from insurance companies, asset managers and corporate treasuries to family offices and private banking investors
Provided exposure to multiple asset classes including equities, commodities, interest rates, foreign exchange, fixed income, emerging markets, hedge funds and property
Grown assets under management to more than USD 6bn* in structured and quantitative strategies and manages more than 70 funds
Built a global footprint with funds distributed throughout South America, Europe and Asia Pacific
Increased its strong front- to back-office team to 70
*as of 30 June 2008
Fund Solutions
Fund Solutions
Barclays Capital Fund Solutions (BCFS) is the investment management business of Barclays Capital, the investment banking division of Barclays Bank PLC.
The emergence of new asset classes, growth in demand for derivative solutions and an investor shift towards absolute returns have identified a strong necessity for an alternative fund management approach that:
Offers clients greater customisation of investment management products
Uses state-of-the art financial thinking but is adaptive to changes in the investment environment
Delivers multi-asset class performance, with the flexibility to access new asset classes as they emerge
Considers the complexities of multi-jurisdictional investors and asset bases to deliver pragmatic financial solutions
The BCFS business model and approach focus on this evolving market segment. BCFS combines its multi–jurisdictional fund expertise with world-class structuring, derivatives trading and asset allocation expertise to deliver applied investment innovation in fund management across all asset classes. The BCFS team is advised by Barclays Capital’s award-winning research team.
Barclays Capital Fund Solutions (BCFS) is the investment management business of Barclays Capital, the investment banking division of Barclays Bank PLC.
The emergence of new asset classes, growth in demand for derivative solutions and an investor shift towards absolute returns have identified a strong necessity for an alternative fund management approach that:
Offers clients greater customisation of investment management products
Uses state-of-the art financial thinking but is adaptive to changes in the investment environment
Delivers multi-asset class performance, with the flexibility to access new asset classes as they emerge
Considers the complexities of multi-jurisdictional investors and asset bases to deliver pragmatic financial solutions
The BCFS business model and approach focus on this evolving market segment. BCFS combines its multi–jurisdictional fund expertise with world-class structuring, derivatives trading and asset allocation expertise to deliver applied investment innovation in fund management across all asset classes. The BCFS team is advised by Barclays Capital’s award-winning research team.
Wednesday, June 3, 2009
Foreign Exchange Trader III
Responsible for the timely buying and selling of foreign currencies. Recommends competitive foreign exchange rates based on market performance. Reviews orders to ensure accuracy, proper record keeping, and conformance to regulations. Carries out trades and maintains the organization's accounts. Requires a bachelor's degree in area of specialty and at least 5 years of experience in the field or in a related area, and may require state license. Familiar with a variety of the field's concepts, practices, and procedures. Relies on extensive experience and judgment to plan and accomplish goals. Performs a variety of tasks. May lead and direct the work of others. A wide degree of creativity and latitude is expected.
Currency Trading Between Banks
Banks are a major force in the FX market and employ a large number of traders. Trading between banks is done in two ways—through a broker or directly with each other.
Brokers: If a U.S. bank trades with another bank, a FX broker may be used as an intermediary. The broker arranges the transaction, matching the buyer and seller without ever taking a position and charges a commission to both the buyer and seller. About a third of transactions are arranged in this way.
Direct: Mostly banks deal with each other directly. A trader "makes a market" for another by quoting a two-way price i.e. he is willing to buy or sell the currency. The difference between the two price quotes (the spread) is usually no more than 10 pips, or hundredths, of a currency unit.
Most currencies are quoted in terms of how many units of that currency would equal $1. However, the British pound, New Zealand dollar, Australian dollar, Irish punt and the Euro are quoted in terms of how many U.S. dollars would equal one unit of those currencies.
The currencies of the world’s large, industrialized economies, or hard currencies, are always in demand and are actively traded. In terms of trading volumes, the FX market is dominated by four currencies: the U.S. dollar, the euro, the Japanese yen and the British pound. Together these account for over 80 percent of the market.
It is not always easy to find a market for all currencies. The demand for currencies of less developed countries, soft currencies, is a lot less than for the hard currencies. Weak demand internationally along with exchange controls may make these currencies difficult to convert.
Brokers: If a U.S. bank trades with another bank, a FX broker may be used as an intermediary. The broker arranges the transaction, matching the buyer and seller without ever taking a position and charges a commission to both the buyer and seller. About a third of transactions are arranged in this way.
Direct: Mostly banks deal with each other directly. A trader "makes a market" for another by quoting a two-way price i.e. he is willing to buy or sell the currency. The difference between the two price quotes (the spread) is usually no more than 10 pips, or hundredths, of a currency unit.
Most currencies are quoted in terms of how many units of that currency would equal $1. However, the British pound, New Zealand dollar, Australian dollar, Irish punt and the Euro are quoted in terms of how many U.S. dollars would equal one unit of those currencies.
The currencies of the world’s large, industrialized economies, or hard currencies, are always in demand and are actively traded. In terms of trading volumes, the FX market is dominated by four currencies: the U.S. dollar, the euro, the Japanese yen and the British pound. Together these account for over 80 percent of the market.
It is not always easy to find a market for all currencies. The demand for currencies of less developed countries, soft currencies, is a lot less than for the hard currencies. Weak demand internationally along with exchange controls may make these currencies difficult to convert.
Sources for currency demand on the FX market
The currency of a growing economy with relative price stability and a wide variety of competitive goods and services will be more in demand than that of a country in political turmoil, with high inflation and few marketable exports.
Money will flow to wherever it can get the highest return with the least risk. If a nation’s financial instruments, such as stocks and bonds, offer relatively high rates of return at relatively low risk, foreigners will demand its currency to invest in them.
FX traders speculate within the market about how different events will move the exchange rates. For example:
News of political instability in other countries drives up demand for U.S. dollars as investors are looking for a "safe haven" for their money.
A country’s interest rates rise and its currency appreciates as foreign investors seek higher returns than they can get in their own countries.
Developing nations undertaking successful economic reforms may experience currency appreciation as foreign investors seek new opportunities.
Money will flow to wherever it can get the highest return with the least risk. If a nation’s financial instruments, such as stocks and bonds, offer relatively high rates of return at relatively low risk, foreigners will demand its currency to invest in them.
FX traders speculate within the market about how different events will move the exchange rates. For example:
News of political instability in other countries drives up demand for U.S. dollars as investors are looking for a "safe haven" for their money.
A country’s interest rates rise and its currency appreciates as foreign investors seek higher returns than they can get in their own countries.
Developing nations undertaking successful economic reforms may experience currency appreciation as foreign investors seek new opportunities.
Determination of Foreign Exchange Rates
Exchange rates respond directly to all sorts of events, both tangible and psychological—
Business cycles;
Balance of payment statistics;
Political developments;
New tax laws;
Stock market news;
Inflationary expectations;
International investment patterns;
And government and central bank policies among others.
At the heart of this complex market are the same forces of demand and supply that determine the prices of goods and services in any free market. If at any given rate, the demand for a currency is greater than its supply, its price will rise. If supply exceeds demand, the price will fall.
The supply of a nation’s currency is influenced by that nation’s monetary authority, (usually its central bank), consistent with the amount of spending taking place in the economy. Government and central banks closely monitor economic activity to keep money supply at a level appropriate to achieve their economic goals
Business cycles;
Balance of payment statistics;
Political developments;
New tax laws;
Stock market news;
Inflationary expectations;
International investment patterns;
And government and central bank policies among others.
At the heart of this complex market are the same forces of demand and supply that determine the prices of goods and services in any free market. If at any given rate, the demand for a currency is greater than its supply, its price will rise. If supply exceeds demand, the price will fall.
The supply of a nation’s currency is influenced by that nation’s monetary authority, (usually its central bank), consistent with the amount of spending taking place in the economy. Government and central banks closely monitor economic activity to keep money supply at a level appropriate to achieve their economic goals
J–curve
The J–curve explains why the trade position does not improve soon after the weakening of a currency. Most import/export orders are taken months in advance. Immediately after a currency’s value drops, the volume of imports remains about the same, but the prices in terms of the home currency rise. On the other hand, the value of the domestic exports remains the same, and the difference in values worsens the trade balance until the imports and exports adjust to the new exchange rates.
Exchange rates are an important consideration when making international investment decisions. The money invested overseas incurs an exchange rate risk.
When an investor decides to "cash out," or bring his money home, any gains could be magnified or wiped out depending on the change in the exchange rates in the interim. Thus, changes in exchange rates can have many repercussions on an economy:
Affects the prices of imported goods
Affects the overall level of price and wage inflation
Influences tourism patterns
May influence consumers’ buying decisions and investors’ long-term commitments.
Exchange rates are an important consideration when making international investment decisions. The money invested overseas incurs an exchange rate risk.
When an investor decides to "cash out," or bring his money home, any gains could be magnified or wiped out depending on the change in the exchange rates in the interim. Thus, changes in exchange rates can have many repercussions on an economy:
Affects the prices of imported goods
Affects the overall level of price and wage inflation
Influences tourism patterns
May influence consumers’ buying decisions and investors’ long-term commitments.
Foreign Exchange Market Participants
There are four types of market participants—banks, brokers, customers, and central banks.
Banks and other financial institutions are the biggest participants. They earn profits by buying and selling currencies from and to each other. Roughly two-thirds of all FX transactions involve banks dealing directly with each other.
Brokers act as intermediaries between banks. Dealers call them to find out where they can get the best price for currencies. Such arrangements are beneficial since they afford anonymity to the buyer/seller. Brokers earn profit by charging a commission on the transactions they arrange.
Customers, mainly large companies, require foreign currency in the course of doing business or making investments. Some even have their own trading desks if their requirements are large. Other types of customers are individuals who buy foreign exchange to travel abroad or make purchases in foreign countries.
Central banks, which act on behalf of their governments, sometimes participate in the FX market to influence the value of their currencies.
Banks and other financial institutions are the biggest participants. They earn profits by buying and selling currencies from and to each other. Roughly two-thirds of all FX transactions involve banks dealing directly with each other.
Brokers act as intermediaries between banks. Dealers call them to find out where they can get the best price for currencies. Such arrangements are beneficial since they afford anonymity to the buyer/seller. Brokers earn profit by charging a commission on the transactions they arrange.
Customers, mainly large companies, require foreign currency in the course of doing business or making investments. Some even have their own trading desks if their requirements are large. Other types of customers are individuals who buy foreign exchange to travel abroad or make purchases in foreign countries.
Central banks, which act on behalf of their governments, sometimes participate in the FX market to influence the value of their currencies.
The foreign exchange market
The foreign exchange market, or the "FX" market, is where the buying and selling of different currencies takes place. The price of one currency in terms of another is called an exchange rate.
The market itself is actually a worldwide network of traders, connected by telephone lines and computer screens—there is no central headquarters. There are three main centers of trading, which handle the majority of all FX transactions—United Kingdom, United States, and Japan.
Transactions in Singapore, Switzerland, Hong Kong, Germany, France and Australia account for most of the remaining transactions in the market. Trading goes on 24 hours a day: at 8 a.m. the exchange market is first opening in London, while the trading day is ending in Singapore and Hong Kong. At 1 p.m. in London, the New York market opens for business and later in the afternoon the traders in San Francisco can also conduct business. As the market closes in San Francisco, the Singapore and Hong Kong markets are starting their day.
The FX market is fast paced, volatile and enormous—it is the largest market in the world. In 2001 on average, an estimated $1,210 billion was traded each day—roughly equivalent to every person in the world trading $195 each day.
The market itself is actually a worldwide network of traders, connected by telephone lines and computer screens—there is no central headquarters. There are three main centers of trading, which handle the majority of all FX transactions—United Kingdom, United States, and Japan.
Transactions in Singapore, Switzerland, Hong Kong, Germany, France and Australia account for most of the remaining transactions in the market. Trading goes on 24 hours a day: at 8 a.m. the exchange market is first opening in London, while the trading day is ending in Singapore and Hong Kong. At 1 p.m. in London, the New York market opens for business and later in the afternoon the traders in San Francisco can also conduct business. As the market closes in San Francisco, the Singapore and Hong Kong markets are starting their day.
The FX market is fast paced, volatile and enormous—it is the largest market in the world. In 2001 on average, an estimated $1,210 billion was traded each day—roughly equivalent to every person in the world trading $195 each day.
Foreign Exchange Market: What Is It?
To buy foreign goods or services, or to invest in other countries, companies and individuals may need to first buy the currency of the country with which they are doing business. Generally, exporters prefer to be paid in their country’s currency or in U.S. dollars, which are accepted all over the world.
When Canadians buy oil from Saudi Arabia they may pay in U.S. dollars and not in Canadian dollars or Saudi riyals, even though the United States is not involved in the transaction.
When Canadians buy oil from Saudi Arabia they may pay in U.S. dollars and not in Canadian dollars or Saudi riyals, even though the United States is not involved in the transaction.
Associated Careers
FX traders are good at strong and immediate decision making, and many apply this skill to other trading environments, such as stock trading, sales, or institutional buying. Their mathematical and financial skills recommend them to Wall Street firms in a number of positions, from back-office account settlement to options valuation analysis. In general, though, FX traders seek the adrenaline rush of trading and enjoy the open unregulated market-the number who leave (a small 20 percent over the course of a career) actually provide the largest single industry donation of manpower to the world of professional gambling.
Paying Your Dues
Economics, mathematics, and statistics majors have a distinct advantage in applying for positions in this field, as do history majors whose coursework included economics. A bachelor’s degree is required. Any experience in a trading environment is valued, as is any work that demonstrates the ability to work hard, make fast and accurate decisions, and manipulate numbers. Many employers appreciate study abroad, international work experience or fluency in a foreign language. As a number of entry-level positions are account representatives as opposed to trading positions, candidates who have good interpersonal skills and access to capital may have an advantage. While on the job, keeping abreast of changes in the industry is important; continuing education is the norm. Few people leave to get advanced degrees in this field-there is a reverse snobbery associated with most trading floors that holds that traders are born, not made, and that no advanced degree will ever make anyone a more competent trader.
A Day in the life of a Foreign Exchange Trader
A foreign exchange trader looks at the various factors that influence local economies and rates of exchange, then takes advantage of any misvaluations of currencies by buying and selling in different foreign exchange markets. Those with the most information, the best contacts, and strongest decision-making skills come out ahead. “It’s the wild west of trading,” wrote one foreign exchange (FX) trader, “and remember: A lot of people died in the wild west.” Those who are comfortable with a high degree of risk and uncertainty should look into this exciting career. A foreign exchange trader manages an account, looks at reports, reads the press from various countries, and most importantly, spends time on the phone. He may spend up to 80 percent of the day on the telephone and working at his computer. Traders must act fast to exploit valuation differences: “You’ve got seconds to decide how millions of dollars should be spent,” said one trader, “so you have to have confidence.” Confidence ranked second right after “guts” in qualities important in new traders. A sharp analytic mind is also crucial; while a variety of degrees are helpful, those with technical or scientific analysis backgrounds tend to find the job more manageable. Accounting strengths are helpful in keeping track of positions and profit and losses throughout hectic days. FX traders specialize early in their careers, following one currency and the underlying economy of its country. Many traders specialize in groups of geographically related countries, such as those who trade Central American currencies or Pacific Rim currencies. Since foreign exchange trading is international, it can take place at any time of day. Many managers run twenty-four-hour shops and do business around the clock; most employees do have regular shifts, but world events may demand being summoned from bed late at night. Eighty percent of the traders we surveyed were satisfied with their choice of profession, but over 40 percent responded that they were exhausted at every day’s end.
peculating
Speculating is by nature profit-driven. In the forex market, futures and spot forex are not all that different. So why exactly would you want to participate in the futures market instead of the spot market? Well, there are several arguments for and against trading in the futures market:
Advantages
• Lower spreads (2-3).
• Lower transaction costs (as low as $5 per contract).
• More leverage (often $500+ per contract).
Disadvantages
• Often requires a higher amount of capital ($100,000 lots).
• Limited to the exchange's session times.
• NFA (National Futures Association) fees may apply.
Advantages
• Lower spreads (2-3).
• Lower transaction costs (as low as $5 per contract).
• More leverage (often $500+ per contract).
Disadvantages
• Often requires a higher amount of capital ($100,000 lots).
• Limited to the exchange's session times.
• NFA (National Futures Association) fees may apply.
Hedging
There are many reasons to use a hedging strategy in the forex futures market. One main purpose is to neutralize the effect of currency fluctuations on sales revenue. For example, if a business operating overseas wanted to know exactly how much revenue it will obtain (in U.S. dollars) from its European stores, it could purchase a futures contract in the amount of its projected net sales to eliminate currency fluctuations.
When hedging, traders must often choose between futures and another derivative known as a forward. There are several differences between these two instruments, the most notable of which are these:
• Forwards allow the trader more flexibility in choosing contract sizes and setting dates. This allows you to tailor the contracts to your needs instead of using a set contract size (futures).
• The cash that's backing a forward is not due until the expiration of the contract, whereas the cash behind futures is calculated daily, and buyer and seller are held liable for daily cash settlements. By using futures, you have the ability to re-evaluate your position as often as you like. With forwards, you must wait until the contract expires.
When hedging, traders must often choose between futures and another derivative known as a forward. There are several differences between these two instruments, the most notable of which are these:
• Forwards allow the trader more flexibility in choosing contract sizes and setting dates. This allows you to tailor the contracts to your needs instead of using a set contract size (futures).
• The cash that's backing a forward is not due until the expiration of the contract, whereas the cash behind futures is calculated daily, and buyer and seller are held liable for daily cash settlements. By using futures, you have the ability to re-evaluate your position as often as you like. With forwards, you must wait until the contract expires.
Forex Futures versus Traditional Futures
Both forex and traditional futures operate in the same basic manner: a contract is purchased to buy or sell a specific amount of an asset at a particular price on a predetermined date. (For an in-depth introduction to futures, see Futures Fundamentals.) There is, however, one key difference between the two: forex futures are not traded on a centralized exchange; rather, the deal flow is available through several different exchanges in the U.S. and abroad. The vast majority of forex futures are traded through the Chicago Mercantile Exchange (CME) and its partners (introducing brokers).
However, this is not to say that forex futures contracts are OTC per se; they are still bound to a designated 'size per contract,' and they are offered only in whole numbers (unlike forward contracts). It is important to remember that all currency futures quotes are made against the U.S. dollar, unlike the spot forex market.
However, this is not to say that forex futures contracts are OTC per se; they are still bound to a designated 'size per contract,' and they are offered only in whole numbers (unlike forward contracts). It is important to remember that all currency futures quotes are made against the U.S. dollar, unlike the spot forex market.
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