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Currency Hedge

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Does currency hedging provide an edge?

A growing number of Australians are choosing to hedge their international equity exposures. Currency movements are difficult to predict so investors should treat currency hedging as a way to manage risk, not to add return.

To hedge or not to hedge?

The decision whether to hedge your international equity portfolio can impact your investment over the short and medium term, but an analysis of the data shows that currency impact over the long term is negligible.

The positive FX hedge returns have now gone

Many investors who hold offshore securities do not realise that much of the return comes from the FX hedge rather than the asset itself. And now US rates have risen, the benefit for Aussies has turned around.

Winners and losers in sharemarkets, 2017/18

The Australian market again delivered strong returns in 2017-2018 with big sector differences, but there were large variations in global performance depending on the currency hedging strategy.

The merit of currency exposure if equity markets fall

Australian investors with foreign currency assets must consider whether to hedge the currency exposure, but the overall context of their portfolio is relevant or losses could be magnified.

Currency risk deserves more than a coin toss

Many investors in global portfolios overlook the currency exposure and should consider leaving hedging decisions to specialists. There is no single optimal hedging strategy as conditions vary over time.

Australian dollar follows commodity prices

Australia's reliance on raw material exports combined with imports of manufactured goods is ensuring that the Australian dollar remains closely pegged to commodities prices.

Understanding foreign exchange risk

Investing in foreign assets brings with it foreign currency exposure. Your return not only depends on the performance of the asset but on changes in the exchange rate, which can work against you or for you.

Currency hedging for international equity portfolios

With recent volatility in the value of the Australian dollar, investor attention is drawn to the topic of currency hedging. What impact does currency have on an international equity portfolio for an Australian investor?

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