Moreover, as the portfolio is rebalanced periodically (often at month end) to reflect movements in prices over the period, it is very likely that the foreign exchange transactions to rebalance the FX component of the portfolio occur during the London 4pm fixing window to minimise the tracking error against the calculated benchmark.
When the sun comes up, you better be running.” Understanding the risks and learning to manage them has been the mantra for survival in any age or in any realm of life. In fact, managing risks, I would say, is one of the critical attributes of human beings which differentiated them from the others and helped in their survival and development.