Summary of The Case for Not Currency Hedging Foreign Equity Investments

Looking for the report?
We have the summary! Get the key insights in just 5 minutes.

The Case for Not Currency Hedging  Foreign Equity Investments summary
Start getting smarter:
or see our plans




  • Innovative
  • Applicable


The strengthening of the US dollar has re-energized the debate about whether American investors should hedge currency exposures in their international investments so as to eliminate the impact of foreign exchange fluctuations on their portfolios. When it comes to equities, the answer for most investors is no, according to investment analyst Catherine LeGraw. Her authoritative white paper adroitly debunks some of the myths about currency hedging. getAbstract recommends it to US investors who want to understand the dynamics of global portfolios.

About the Author

CFA charterholder Catherine LeGraw is a member of GMO’s Asset Allocation team. She has worked as an analyst at Bear, Stearns & Co. and as a director at BlackRock. She studied economics at the University of Pennsylvania.



Globalization has muted the impact of currency movements on American investors’ international stock holdings, challenging long-held notions about the importance of hedging foreign exchange risk. Today, big companies with multicurrency cash flows typically derive less than 35% of their revenues from their home turfs, compared to 60% in 1992. Similarly, natural resources companies don’t need a hedge. They deal with commodities risk but not currency risk; the commodities they produce have a globally set price. Export-driven businesses often gain when their base currency falls, because their products become cheaper overseas...

More on this topic

Customers who read this summary also read

The Spider Network
Too Smart for Our Own Good
Investment Banking Explained
Dance of the Trillions
Cracking the Emerging Markets Enigma
The Future Is Asian

Related Channels

Comment on this summary