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Glossary

Quanto

Label for investment and leveraged products to indicate that they are hedged against currency fluctuations.

Quanto is a suffix for currency-hedged investment or leveraged products of all kinds. Quanto certificates are based on underlying assets such as shares, indices or commodities, whose prices are quoted in currencies other than EUR. Thus, a quanto certificate "eliminates" potential currency fluctuations, leaving room only for the absolute performance of the underlying. However, currency hedging has its price: quanto certificates usually have a wider spread between bid and ask rates than other types of certificates.


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