Credit Suisse has launched a euro-dominated foreign exchange fund, combining six diversified foreign exchange strategies. This UCITS III-compliant fund, known as the UCITS III FX Factor Fund, will be offered to institutional investors, family offices, high net worth individuals and private clients.

The UCITS III FX Factor Fund aims to track the performance of the Credit Suisse FX Factor Index, which was launched in April this year. According to Credit Suisse, over the last year, this index has yielded an excess return of 8.3 per cent above LIBOR with a Sharpe ratio of 1.69.

A number of investment firms have launched forex funds and expanded the ability of private, as well as institutional investors, to exploit shifts in the global currency market. Among those firms offering private traders access to the market are Barclays Stockbrokers and Saxo, the Danish bank. 

The FX Factor Index is based on six strategies: carry, momentum, valuation, growth, terms of trade and emerging markets; this, the firm claims, will help the fund adjust to changing market conditions.

The fund is designed to provide an attractive risk/return profile and low correlation to other asset classes, the bank said in a statement. Risk is controlled and monitored via a volatility target and maximum limits are set on individual currency exposures.

There are 18 currencies employed in the funds' strategy. Apart from the euro, it employs nine other major currencies as well as eight emerging market currencies.

“We believe investors want to diversify their exposure and reduce risk through systematic, rules-based strategies,” said Simon Hards, managing director and head of FX options at Credit Suisse.

“The launch of this fund demonstrates the momentum Credit Suisse has shown in developing superior products with diversified and controlled returns from FX markets,” he added.