The Company maintains a program to enter into exchange traded futures as a macro hedging strategy to hedge market price and interest rate exposures with respect to its total portfolio of seed investments in sponsored investment products. At December 31, 2023 and 2022, the Company had outstanding exchange traded futures related to this macro hedging strategy with aggregate notional values of approximately $1.8 billion and $1.5 billion, with expiration dates during the first quarter of 2024 and 2023, respectively.

In addition, beginning in the first quarter of 2023, the Company entered into futures to economically hedge the exposure to market movements on certain deferred cash compensation plans. At December 31, 2023 , the Company had outstanding exchange traded futures with aggregate notional values related to its deferred cash compensation hedging program of approximately $204 million, with expiration dates during the first quarter of 2024.

Changes in the value of the futures contracts are recognized as gains or losses within nonoperating income (expense). Variation margin payments, which represent settlements of profit/loss, are generally received or made daily, and are reflected in other assets and other liabilities on the consolidated statements of financial condition. These amounts were not material as of December 31, 2023 and 2022.

The Company executes forward foreign currency exchange contracts to mitigate the risk of certain foreign exchange movements. At December 31, 2023 and 2022, the Company had outstanding forward foreign currency exchange contracts with aggregate notional values of approximately $3.1 billion and $2.2 billion, with expiration dates in January 2024 and January 2023, respectively.

At both December 31, 2023 and 2022, the Company had a derivative providing credit protection with a notional amount of approximately $17 million to a counterparty, representing the Company’s maximum risk of loss with respect to the derivative. The Company carries the derivative at fair value based on the expected discounted future cash outflows under the arrangement.

The following table presents the fair values of derivative instruments recognized in the consolidated statements of financial condition at December 31, 2023:


	Assets					Liabilities
	Statement of Financial Condition	December 31,		December 31,		Statement of Financial Condition	December 31,		December 31,
(in millions)	Classification	2023		2022		Classification	2023		2022
Derivative instruments
Forward foreign currency exchange contracts	Other assets	$	19	$	1	Other liabilities	$	6	$	19

The following table presents realized and unrealized gains (losses) recognized in the consolidated statements of income on derivative instruments:


		Gains (Losses)
(in millions)	Statement of Income Classification	2023			2022			2021
Derivative Instruments
Exchange traded futures(1)	Nonoperating income (expense)	$	(88	)	$	36		$	—
Forward foreign currency exchange contracts	General and administration expense		98			(222	)		(29	)
Total return swaps	Nonoperating income (expense)		—			83			(99	)
Total gain (loss) from derivative instruments		$	10		$	(103	)	$	(128	)

(1)

Amounts include $112 million of losses and $36 million of gains on futures used as a macro hedging strategy of seed investments for 2023 and 2022, respectively. In addition, amounts include $24 million of gains on futures used to economically hedge certain deferred cash compensation plans for 2023.

The Company's CIPs may utilize derivative instruments as a part of the funds' investment strategies. The change in fair value of such derivatives, which is recorded in nonoperating income (expense), was not material for 2023, 2022 and 2021.

See Note 14, Borrowings, for more information on the Company’s net investment hedge.