United States

Should I hedge currency exposure when investing in global fixed income?


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Investors have several decisions to make when investing outside of the United States. Some of the questions include which countries you want to be exposed to and whether you want to be exposed to equity or debt instruments within those countries. Another major question is whether investors should hedge the currency exposure when investing outside the United States. In this piece, we will focus on the currency decision specifically as it relates to investing in global fixed income.

Lower expected volatility is a main reason to hedge currency exposure

At RSM US Wealth Management, we intend for an allocation to fixed income to significantly reduce the total portfolio level of volatility relative to a portfolio without fixed income investments. While it might seem redundant or even obvious, if we expect an allocation of fixed income to significantly reduce volatility, then we must choose the appropriate fixed income investments that provide this outcome, as not all fixed income investing is the same. Read the entire article for more information.

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