Currency hedging: What to do about a problem like the pound

9 min Read Published: 29 Nov 2016

As promised in my last weekly newsletter I will answer the following question in detail. It was asked by an 80-20 Investor member in November's Chatterbox but warranted a greater explanation and a wider airing. The question was:

Within my portfolio I have quite a high allocation to non UK investments. As the dollar has appreciated against sterling these investments have done pretty well. Trouble is I’m now reluctant to invest in overseas funds as I fear sterling will likely recover some of its lost value.
How do you see the best way of dealing with this?

Many of you may be wondering why anyone would be concerned given that we are seeing headlines stating that the dollar has hit 13 year highs. However the dollar strength in this instance is being measured against a basket of currency market peers.

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I’m MTTM AI (beta), powered by DaMoney. I can help with personal finance questions. I’m an AI tool, not a financial adviser. Answers are for information purposes only and do not constitute financial advice. Always verify responses with your own research and seek professional advice. By using this chat, you agree to our Terms of Use.
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