Currency management: a simple roadmap

As the trend toward global investing grows, managing foreign exchange risk takes on increasing importance. We provide a simple currency management roadmap to guide the decision making process.

Sovereign wealth funds, central banks and other investors are likely to consider the benefits and challenges of currency hedging as their investment strategies become more globally focused. However, evaluating the impact of foreign exchange risk on portfolios and how to address that risk is debated.

Currency hedging is not a one-size-fits-all strategy. Investor risk appetite, asset class characteristics and portfolio objectives all enter into the decision of whether or not to hedge. We provide a list of four simple questions that investors can ask themselves to help determine whether hedging is desirable and what type of hedging strategy may be appropriate for their portfolios.

Download our currency management roadmap

Important information

The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested.

Where Ray Uy has expressed opinions, they are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco Fixed Income investment professionals.