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The Share Class Hedging election is available in the Create Entity Share Class Information panel, the Edit Entity Share Class Information panel, and the Create Master Fund panel. A description of this option follows.
Option | Tag | Description |
|---|---|---|
Share Class Hedging | 18045 | Determines if the share class elects share class hedging. Share class hedging allows a share class to have exposure to assets/securities denominated in a foreign currency without the associated currency risk of the base currency of the fund. A share class can elect to use share class hedging in order to allow Eagle Accounting to allocate the currency gain/loss directly to the hedge class. Options include:
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For more information about setting up share classes, see Manage Share Classes and Create Entity Share Class Information Panel Options. For more information about setting up master funds, see Create Master Fund Entities and Create Master Fund Panel Options.
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In order for a fund to convert to Eagle’s mutual fund accounting solution and process share class hedging:
You must set up the fund to have sectors. Each hedge share class must have its own sector where forward currency contracts will be traded and valued.
You must exclude the sectors as part of the share class allocation process. Otherwise, the unrealized and realized gains and losses from these forward currency contract holdings would be fully allocated to the hedge share class by the sector exclusion process.
In order to exclude a sector to one specific share class, first set up the sectors for the mutual fund. You must create a sector allocation rule, create sectors, and post sector allocations. For more information, see Manage Sector/Fund Information.
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