• Currency:
  • Currency Risk Management
  • Currency Absolute Return
  • Mellon Evolution Currency Option Fund

Approach and Differentiating Strengths
Pareto Investment Management Limited (“Pareto”) is a specialist in currency management strategies. With over $50 billion in actively managed currency exposure and a 15-year AIMR-PPS compliant track record, we are one of the largest and longest established currency managers in the world. The firm's client profile is predominantly large retirement funds, monetary authorities and foundations and endowments. Our strategies can be employed either as a stand-alone strategy or as part of other investment products.

Pareto has a client-focused team culture distinguished by a balance of investment expertise and academic excellence. Pareto was founded on the principle that advanced technology could be applied to investment management. Our unique insight has been to apply sophisticated techniques to the problem of managing currency.

Philosophy
At Pareto, we believe consistent value-added is achieved by understanding and exploiting characteristics of risk in the currency markets. Through active hedging of currency exposures, Pareto's quantitative model seeks to minimize the risk-of-loss embedded in international investment portfolios, while simultaneously exploiting the available return due to currency movements.

Process
Pareto employs a proprietary, model-driven, quantitative process to measure and manage risk while adding value to your portfolio. The common thread that runs through all of Pareto's investment strategies is the emphasis on risk management. Pareto aims to exploit market inefficiencies while continually quantifying and managing downside risk. Pareto measures downside risk as the risk-of-loss versus the benchmark, as opposed to the traditional measure of standard deviation (tracking error). This focus enables each Pareto strategy to take into account both risk characteristics and potential investment returns. As a result, Pareto is able to add value by taking positions in a risk-controlled framework.

Pareto’s approach has stood the test of time and has produced attractive track records across the product range. Pareto's strategies do not aim to produce large relative gains in any one period, but rather seek consistent out-performance leading to top quartile results over time.

^{* Source: Pareto Investment Management Limited as at 30 June 2007}