Morningstar conference: Currencies are less volatile than equities and fixed income
Morningstar Alternative Investment Strategist Nadia Papagiannis summarizes portfolio manager Axel Merk's presentation at Morningstar's ETF conference: "
Part III: Currencies are less volatile than equities and fixed income
Besides sporting low correlations to traditional assets, currencies are less volatile than equities and even fixed income. Many investors believe that currencies are more volatile than they actually are, because, traditionally, currency strategies are highly leveraged, and because small moves in currencies are highly publicized. But Merk doesn't use leverage in his strategies, and small movements in currencies do not have a large impact on the overall currency market, which is very large and extremely liquid.