While investors continue to utilize exchange-traded products to add geographic diversity to their portfolios, few have considered the impact of currency fluctuations on their foreign, non-U.S. dollar-denominated investments. Martin Kremenstein, Americas Head of Passive Asset Management at Deutsche Asset & Wealth Management, recently took time to discuss with us key points investors should know about foreign currency risk, highlighting the benefits and potential drawbacks of hedging currency fluctuations [see King Dollar ETFdb Portfolio]. ETF Database (ETFdb): What is foreign currency risk? Martin Kremenstein (MK): The Foreign Exchange market is one of the largest most liquid markets in the world. Foreign currency risk is the exposure that investors have to changes in the value of one currency against another, eg USD vs JPY. This exposure adds volatility to their portfolio and can lead to material changes in their returns. If you are a US domiciled investor, and have not hedged your currency risk, you [...] Click here to read the original article on ETFdb.com. Related Posts: At Long Last: An ETF To Bet Against The Euro Top 10 Noteworthy ETF Trends Of 2011 E*TRADE Joins Commission Free ETF Party WisdomTree Files For Two More International ETFs June ETF Roundup: Launches, Filings, and Closures
While investors continue to utilize exchange-traded products to add geographic diversity to their portfolios, few have considered the impact of currency fluctuations on their foreign, non-U.S. dollar-denominated investments. Martin Kremenstein, Americas Head of Passive Asset Management at Deutsche Asset & Wealth Management, recently took time to discuss with us key points investors should know about foreign currency risk, highlighting the benefits and potential drawbacks of hedging currency fluctuations [see King Dollar ETFdb Portfolio]. ETF Database (ETFdb): What is foreign currency risk? Martin Kremenstein (MK): The Foreign Exchange market is one of the largest most liquid markets in the world. Foreign currency risk is the exposure that investors have to changes in the value of one currency against another, eg USD vs JPY. This exposure adds volatility to their portfolio and can lead to material changes in their returns. If you are a US domiciled investor, and have not hedged your currency risk, you [...]
Click here to read the original article on ETFdb.com.
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