Record Currency Management explains an unusual opportunity that has emerged for U.S. investors because of the breakdown of the no-arbitrage condition called covered interest rate parity.
European markets, have disappointed investors this year, to put it mildly. This offers all the more reason to re-engage with portfolio allocations and dissect which factors have been driving returns and if investors’ current allocations can deliver the best possible exposure to the markets.
Bank of Japan (BOJ) Governor Haruhiko Kuroda wasted no time to promote a weaker yen. As soon as Federal Reserve (Fed) chair Janet Yellen put the Fed’s resolve to raise U.S. interest rates back on the table, Kuroda went out of his way to stress that the BOJ is ready to move the other way.
India stands to be one of the great growth stories of the coming decades. But does India’s high inflation erode the value of the rupee such that returns for U.S. investors buying Indian equities will be hurt by a perpetually falling exchange rate?
Many investors deride the trend toward currency hedging in international equities as a passing fad. WisdomTree has maintained for seven years that most U.S. investors are unnecessarily taking on too much risk strategically when they invest internationally. Why such conviction?