Industry superannuation fund Hostplus has reduced its passive US dollar currency hedge, increasing the exposure of the total fund to the greenback from 18 per cent to 20 per cent.
The measure was taken last month, after the exchange rate with the Australian dollar hit US$1.05.
"We maintain a passive hedge and we've become a little bit more unhedged," Hostplus chief investment officer Sam Sicilia said.
"We now have got 20 per cent of the total fund unhedged, not just the international exposure. We took a little bit of money off the table."
Hostplus uses a series of automatic triggers that spark adjustments to the currency hedge.
On the downside, triggers were set at US$0.95 and US$0.80, but there were no further trigger points on the upside, Sicilia said.
"We know there are diversification benefits in having a currency exposure of up to 20 per cent, but after that the diversification benefits disappear, so we are not going to become more unhedged than what we are right now," he said.
