Should I hedge currency risk?
A currency question asks how much of a portfolio moves with an exchange rate rather than with the assets themselves. A fund priced in one currency can hold assets in several, so the exposure is rarely the currency on the ticket.
Worked through on a sample portfolio. The figures below are that portfolio’s, not yours.
I can’t give advice or recommendations. I can explain your portfolio’s currency exposure so you can decide.
Here are the current currency exposures in your portfolio:
| Asset | Allocation (%) |
|---|---|
| EUR | 50,53% |
| USD | 22,77% |
| Crypto | 8,61% |
| Cash | 6,06% |
| Precious metal | 5,03% |
What this means (facts only)
- Half of your portfolio value is in EUR (45.974,84 €). About 22,77% is in USD exposures (20.721,48 €).
- Crypto and precious metal exposures together make up 13,64% (7.835,60 € + 4.575,79 €).
- Cash is 5.510,23 €, representing 6,06% of the portfolio.
If you were concerned about currency moves, common objective questions to consider are:
- How much of my portfolio returns are driven by FX versus underlying asset performance?
- Over what horizon would currency moves matter to me (short-term vs long-term)?
- Do I have liabilities in a currency different from my assets?
If you want, I can:
- show historical EUR/USD impact on portfolio returns,
- simulate a scenario (e.g. EUR strengthens by 10% vs USD) and show the hypothetical effect (I will state assumptions).
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Related questions
See this for your own portfolio
The assistant answers the same question about your own holdings, with your figures and today’s prices. Import from your broker, or open the demo portfolio and ask it there.