Russell's FX Guru Steps Down

(December 1, 2011) — Cynthia Steer, who joined Seattle-based Russell Investments’ Americas Institutional business as managing director of investment strategy and consulting in December 2010, has left her position to pursue other interests.

“As you know, Cynthia has a strong reputation in the market, and we are grateful for her contributions during her tenure here, especially in the areas of foreign exchange, sovereign risk and emerging markets. We wish her the best of luck,” Russell spokesperson Katherine Stouffer told aiCIO. 

At Russell, Steer — who was previously chief research strategist for Rogerscasey, where she focused on long-term asset class trends and program implementation — championed the firm’s currency policy work for plan sponsors along with her former colleague, Ian Toner, who wrote “Conscious Currency.” “I consider this”—meaning currency exposure and its potentially disastrous effect on portfolio valuations— “the number one issue that plan sponsors have to deal with,” Steer told aiCIO earlier this year. “Still, for United States-based institutional investors, it’s largely an invisible issue at the policy level—and it’s been the same way for almost 20 years. This will come home to roost for U.S. investors in 2011, 2012, and 2013 if they don’t wake up.”

According to the firm, the message built on its more than 20-year history of research into currency exposure management. Russell’s business is selling currency overlay — hedging out currency risk for very low fees. According to industry sources, what Russell does not do, which many say they can do, is use overlay to reduce risk and increase return for higher fees, calling it alpha generation.

Steer has long challenged the pension plan industry’s philosphy on foreign exchange- primarily stemming from her days as a corporate plan CIO and manager of FX for a corporation.

Russell’s Conscious Currency message complemented its expertise in foreign exchange (FX), a practice that has encountered an increasing amount of scrutiny and lawsuits in recent months, as the ability to obfuscate the true value of currency managers has proved to be a relatively common practice. 

Watch an aiCIO Consultant Corner video with Cynthia Steer, conducted in January.