What would my portfolio look like with reduced FX 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.
To show how your portfolio would look with reduced FX risk I’ll present a simple scenario: convert non-euro exposures (USD and currencies labelled as "Crypto" stay as-is) into EUR at today’s values, keeping all other holdings and prices unchanged. Assumptions are listed below.
Assets reclassified as euro (converted at current values) are shown as a single EUR cash-like holding for clarity. I’ll show the key allocation before and after the change so you can see the effect on currency breakdown and on the cash / euro share.
| Asset | Value (EUR) |
|---|---|
| Portfolio total value | 90.989,80 € |
| Current Euros (cash) | 5.510,23 € |
| Current USD exposure (owned value) | 20.721,48 € |
| Current Crypto exposure (owned value) | 7.835,60 € |
| Current Precious metal exposure | 4.575,79 € |
| Euros after FX reduction (sum of EUR + USD converted) | 66.696,32 |
Notes and calculations:
- Assumption: USD exposure of 20.721,48 € is converted into EUR at the rates implicit in your data; that increases Euros to the "Euros after FX reduction" figure above (Euros after FX reduction = 5.510,23 € + 20.721,48 € = 5.510,23 € + 20.721,48 € = 26.231,71 € added to existing EUR holdings and cash; total shown as a single consolidated EUR bucket).
- Crypto, precious metals and other currencies are left unchanged in this scenario.
- All prices, holdings and total portfolio value remain as today (no buying/selling; exchange rates otherwise fixed).
What this means for allocation (before → after): | Currency bucket | Weight (%) before | Weight (%) after | | --- | --- | | EUR | 50,53% | 72,40 | | USD | 22,77% | 0,00% | | Crypto | 8,61% | 8,61% | | Cash | 6,06% | 6,06% | | Precious metal | 5,03% | 5,03% |
Assumptions:
- USD exposure is fully converted to EUR at current values; exchange rates are fixed; no trading costs, taxes or slippage; holdings otherwise unchanged.
- Crypto and precious metals remain in their current currencies and are not converted.
- This is a hypothetical scenario and not a transaction.
Would you like me to run a different FX-reduction scenario (for example converting crypto too, or only hedging 50% of USD)?
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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.