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I am considering investing in an overseas hedge fund which claims that the cost of hedging the FX risk is just the FX points of the quarterly fx forwards.

The question is: when rolling the contracts to the next quarter, my investment is not exposed to the FX spot at the time of the rolling? Isn't there more uncertainty about the FX impact than just the FX points?

  • Are you concerned about the rolling process itself? That because of the mechanics of the rolling, or the terms of the next quarter's contract, there's a possibility that it might mishedge your exposure? – dg99 Jun 1 '18 at 22:10

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