32 min
Hedging Your Bets, With Currency-Hedged ETFs Canadian Portfolio Manager Podcast
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- Investing
In Episode 9 of the Canadian Portfolio Manager Podcast, we discuss whether currency-hedged ETFs make sense for Canadian investors. Steven Leong, of BlackRock Canada, joins us once again to share his insights on the purpose of currency-hedging, as well as the firm’s currency-hedging process. We then break for an ETF Kombat between XSP (the granddaddy of currency-hedged ETFs), and its younger rival, XUH. We’ll then take a deep dive into the historical risk and return data to help you decide whether currency-hedged ETFs deserve a place in your portfolio. At the end of the show, we’ll discuss the Big Mac Index, which is sure to leave you hungry for more information.
Recap of Episode 8, Making Cents of Your ETF’s Loonie Currency Exposure [0:00:26.9] The purpose of currency-hedging and how the currency-hedging process works [0:03:37.9] Why currency-hedging doesn’t perfectly eliminate all foreign currency exposure [0:05:14.9] Introducing our recommended currency-hedged iShares and Vanguard foreign equity ETFs (XUH, XFH, VUS, VI) [0:07:04.9] ETF Kombat: XSP vs. XUH [0:09:16.9] The largest foreign currency exposures in your asset allocation ETF [0:13:08.9] “Safe-haven” currencies to the rescue: the U.S. dollar and the Japanese yen [0:14:06.9] Has currency-hedging historically reduced or increased a Canadian investor’s risk? [0:16:41.9] Why your portfolio’s asset allocation has an impact on the currency-hedging decision [0:18:51.9] Performance of currency-hedged vs. unhedged ETFs during the Global Financial Crisis [0:20:52.9] Performance of currency-hedged vs. unhedged ETFs during the Global Pandemic [0:22:10.9] The historical impact of currency-hedging on a Canadian investor’s global stock market returns [0:23:55.9] “Considerable currency fluctuations” over more than a century [0:25:20.9] The “hedge-of-least-regret” currency-hedging strategy [0:26:08.9] Making exchange-rate theory more digestible with the Big Mac Index [0:28:38.9]
In Episode 9 of the Canadian Portfolio Manager Podcast, we discuss whether currency-hedged ETFs make sense for Canadian investors. Steven Leong, of BlackRock Canada, joins us once again to share his insights on the purpose of currency-hedging, as well as the firm’s currency-hedging process. We then break for an ETF Kombat between XSP (the granddaddy of currency-hedged ETFs), and its younger rival, XUH. We’ll then take a deep dive into the historical risk and return data to help you decide whether currency-hedged ETFs deserve a place in your portfolio. At the end of the show, we’ll discuss the Big Mac Index, which is sure to leave you hungry for more information.
Recap of Episode 8, Making Cents of Your ETF’s Loonie Currency Exposure [0:00:26.9] The purpose of currency-hedging and how the currency-hedging process works [0:03:37.9] Why currency-hedging doesn’t perfectly eliminate all foreign currency exposure [0:05:14.9] Introducing our recommended currency-hedged iShares and Vanguard foreign equity ETFs (XUH, XFH, VUS, VI) [0:07:04.9] ETF Kombat: XSP vs. XUH [0:09:16.9] The largest foreign currency exposures in your asset allocation ETF [0:13:08.9] “Safe-haven” currencies to the rescue: the U.S. dollar and the Japanese yen [0:14:06.9] Has currency-hedging historically reduced or increased a Canadian investor’s risk? [0:16:41.9] Why your portfolio’s asset allocation has an impact on the currency-hedging decision [0:18:51.9] Performance of currency-hedged vs. unhedged ETFs during the Global Financial Crisis [0:20:52.9] Performance of currency-hedged vs. unhedged ETFs during the Global Pandemic [0:22:10.9] The historical impact of currency-hedging on a Canadian investor’s global stock market returns [0:23:55.9] “Considerable currency fluctuations” over more than a century [0:25:20.9] The “hedge-of-least-regret” currency-hedging strategy [0:26:08.9] Making exchange-rate theory more digestible with the Big Mac Index [0:28:38.9]
32 min