Use Control Center with Share Class Hedging

All capital stock should be settled before executing the transaction close process. Then, once all forward currency prices are received, the forward contracts are valued. The total net assets of the fund are valued once all prices and foreign exchange rates for holdings are received and valued.

During the valuation close process, the system executes the Hedge Ratio Report Edit Test. You can review if the hedge ratios of the hedge share classes break tolerance.

Currency Hedge Ratio Edit Test (EACHR)

In Control Center, the Currency Hedge Ratio Edit Test (EACHR) is available for use with share class hedging. This edit test leverages the calculated hedge ratio from the Hedge Ratio report and measures it against a user defined tolerance. You can set up the Currency Hedge Ratio Edit Test (EACHR) as a CORE edit test or as a CORE-FAH edit test. If the edit test breaks tolerance, the results in the default Mutual Fund status map are mapped to the Verifications-Allocations column within Control Center.

In addition, the Currency Hedge Ratio Edit Test (EACHR) is available as the last step in the default Valuation Close Event Group in Automated Event Wrapper (AEW).

In the following example where you use the Currency Hedge Ratio Edit Test (EACHR) in Control Center, the edit test breaks tolerance, and the results in the default Mutual Fund status map are mapped to Verifications-Allocations column. In the highlighted row for share class G, the Verifications column has a red status symbol, indicating Failed.

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When you examine the row that describes the failure for share class G in the following figure, note the Error Origin Detail value. It indicates: The currency hedge ratio of .955098968281 is outside of the defined tolerance of .98.

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The following figure shows that the Currency Hedge Ratio Edit Test (EACHR) is available as the last step in the default Valuation Close Event Group in Automated Event Wrapper (AEW). When you view event group CC-TRIGGER-VAL-CLOSE-EVENTS, step 38 is CURRENCY HEDGE RATIO EDIT TEST (EACHR).