Podcasts & Videos

Why Currency-Hedge Foreign Developed Equities?

June 19, 2014
International investments are extremely important to a well-diversified portfolio. However, foreign currencies tend to increase portfolio volatility—and may reduce your investment returns. Currency hedging can help. Discover how in our latest podcast.

Bank of Japan security purchase information can be found here

Diversification does not eliminate the risk of experiencing investment losses.

Risk: Also standard deviation, which measures the spread of actual returns around an average return during a specific period. Higher risk indicates greater potential for returns to be farther away from this average.

Hedge: Apply strategies meant to mitigate the impact of currency movements on equity returns.

Volatility: A measure of the dispersion of actual returns around a particular average level.

Federal Reserve ("Fed"): The Federal Reserve System is the central banking system of the United States.

"ECB": European Central Bank.

Tapering: A shift in monetary policy by which the Federal Reserve would begin decreasing the amount of bonds it purchases.

"ETFs": Exchange-traded funds

Mario Draghi: President of the European Central Bank.

Inflation: Characterized by rising price levels.

MSCI EAFE Index: A market cap-weighted index composed of companies representative of the developed market structure of 21 developed equity markets in Europe, Australsia and Japan.

Macro: Focused on issues impacting the overall economic landscape as opposed to those only impacting individual companies.

DXJ – WisdomTree Japan Hedged Equity Fund

HEDJ – WisdomTree Europe Hedged Equity Fund

IHDG – WisdomTree International Hedged Dividend Growth Fund

Past performance is not indicative of future results. You cannot invest directly in an Index. An asset allocation strategy does not guarantee a profit or protect against a loss.

Christopher Gannatti, CFA
Head of Research, Europe
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Jeremy Schwartz, CFA
Global Head of Research
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