New South Wales Treasury Corp.’s move to slash dollar exposure has delivered gains, and the state-owned issuer is positioning for further greenback weakness.
The Australian state’s investment-management unit shifted into defensive currencies such as the yen, franc and euro several years ago, cutting dollar weighting in its portfolio’s currency basket from almost three-quarters to 14%, Chief Investment Officer Stewart Brentnall said. The move lifted returns and the fund is now forecasting a further 10% slide in the dollar.