How does an interest rate hedge work
Currency hedging, in the context of bond funds, is the decision by a portfolio manager to reduce or eliminate a bond fund’s exposure to the movement of foreign currencies.This is typically achieved by buying futures contracts or options that will move in the opposite direction of the currencies held inside of the fund. How does an Interest Rate Collar work? An Interest Rate Collar ensures that you will not pay any more than a pre-determined level of interest on your borrowings. St.George will reimburse you the extra interest should interest rates rise above the level of the Cap. An Interest Rate Collar however, will not allow you to take advantage of interest