| In the United States, most international equity funds do not hedge their foreign currency exposure. This long exposure to foreign currencies contributed to the performance of these funds in the past decade, as the U.S. dollar weakened against major currencies.
More recently, currency movements have reversed, starting with a sharp decline of the yen over the past three years, and the more recent gradual decline of the euro versus the U.S. dollar. This trend is now weighing on the returns of currency-unhedged international equity funds. Not surprisingly, these currency movements have prompted strong flows into currency-hedged exchange-traded funds over the past two years...............................................Full Article: Source
|