[ESMA 34-43-392 UCITS Q&A, section 5, Q&A 1c]

According to Box 8 of CESR’s guidelines, for the purpose of calculating global exposure under the Commitment Approach, hedging arrangements may only be taken into account if they relate to the same asset class. Therefore, hedging arrangements for UCITS funds of funds are possible provided that the management company of the investing UCITS has full knowledge of the underlying investments of the target funds.