I manage a mutual fund where the underlying assets (or the shares i buys) are in USD, and my mutual fund is in CLP (Chilean Pesos). How can i hedge this fx risk without affecting the return of the fund. I had a previous idea of a zero cost collar, but is this option optimal for my problem?

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    $\begingroup$ What do you mean by "I have a fund"? Are you managing a fund in which other people invest by buying shares in it? Is this what you mean by "rentability of the fund" or what do you mean otherwise? By CLP, do you mean the Chilean Peso? $\endgroup$
    – Alper
    Dec 5, 2023 at 5:22
  • $\begingroup$ Please clarify your specific problem or provide additional details to highlight exactly what you need. As it's currently written, it's hard to tell exactly what you're asking. $\endgroup$
    – Community Bot
    Dec 5, 2023 at 10:05
  • $\begingroup$ Don't fx quanto options exist for hedging exactly this form of exposure? $\endgroup$
    – user35980
    Dec 6, 2023 at 5:18
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    $\begingroup$ Let’s say the underlying USD stocks return 8% for a given year, and the CLP depreciates by 4%. Then the fund , measured in CLP, goes up by 12%. What do you want the return to be in this situation ? 8% ? $\endgroup$
    – dm63
    Dec 6, 2023 at 10:22
  • $\begingroup$ @dm63 Saying CLP depreciates 4% via inflation is irrelevant as all currencies depreciate. Unless you're saying compared to USD - then you're just guessing the CLP will have less demand going forward (which isn't an unreasonable guess, but then user70213 may as well just hold all cash-accounts in USD). user70213 is wanting to hedge against the FX of USDCLP going down, not the other way around. $\endgroup$ Dec 8, 2023 at 23:28


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