Sentences with phrase «because currency diversification»

I have no view on the direction of currency movements, but I do prefer unhedged equity ETFs, because currency diversification can lower the volatility of a portfolio, and the cost of hedging is a long - term drag on returns.

Not exact matches

Its relatively high global position reflects the special place the Australian dollar holds in portfolios of international funds managers because of its relation to commodity prices, offering a degree of diversification from other currencies.

I personally prefer using unhedged positions because (a) It is cheaper (b) In the long run, currency effects will average out (c) The value of hedging is questionable when a basket of currencies are involved and (d) While currencies on their own have zero expected return over cash, adding them to a portfolio reduces volatility and offers diversification benefits.

It is typically not a good idea to hedge all of your currency exposure because because currency does offer a diversification benefit.

It can be used as a buffer against calamity because of its high liquidity, currency attributes and its diversification benefits.