Singapore Fund Manager Eyes Maiden FX Derivatives Trade
Singapore-based Ferrell Asset Management is considering trading foreign exchange derivatives in the coming months, especially options, for its recently launched Ferrell Currency and Futures Fund. The fund focuses on Group of Seven and Asian currencies as well as global stock index futures. "We'll use options to become more leveraged and enhance returns," said Dennis Ng, investment director in Singapore. Ng continued that he will likely first employ options on U.S. dollar/yen and euro/U.S. dollar.
The firm plans to wait until it has built up its assets under management before entering over-the-counter trades, according to Ng. The fund was launched in August and has SGD5 million (USD2.74 million) under management. Ng added that the fund currently has a limited number of investors and will be openly marketed next year. "Now we're trying to build a track record." He continued that the fund is currently leveraged around three to five times, mostly with index futures, but it plans to extend this to 20 times leverage when it regularly employs derivatives.
The fund's prime broker is Goldman Sachs but Ng added that Morgan Stanley will also be considered for derivative transactions, stating that pricing is the most important factor in determining the counterparty. Pauling Cheung, spokeswoman at Morgan Stanley in Hong Kong, declined comment. Peter Rose, spokesman at Goldman in Hong Kong, did not return calls.