Which one will carry you further?
SUMMARY
INTRODUCTION
Carry strategies were widely popular before the global financial crisis in 2009, but less thereafter given a substantial drawdown during the crisis when investors reversed their positions and fled to safe but low-yielding currencies like the USD or CHF.
Although the carry strategy recovered in 2010 and 2011, investors’ interest remained muted in the following decade. Partially we can attribute the limited interest to a lack of performance, which in turn can be explained by the low-interest rate environment that made betting on the spread between high yielding and low yielding currencies less attractive.