Andrew Morris: The surprising impact of currency

Diversification is key

clock • 3 min read

In his latest monthly column on investment risk, Andrew Morris considers the impact currency can have on portfolio returns and what can be done to ensure an appropriate exposure is maintained to both UK and overseas assets

Having looked at portfolio rebalancing and the distortion of risk, I thought it prudent this month to consider an oft-forgotten driver of investment returns - currency. When picking up the KIID of a fund with overseas exposure, you will see the risk of ‘currency movements in the value of overseas assets may impact the value of the fund' often cited. But just how much of an impact do they have on the returns generated by a UK investor? At the most extreme, one only has to look at the example of Russia in 2014. Following the military incursion into Ukrainian territory and the ensuing sanct...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Autumn Budget 24: Reeves sets 20% IHT rate on AIM shares

Autumn Budget 24: Reeves sets 20% IHT rate on AIM shares

Chancellor unveils 50% relief

Cristian Angeloni
clock 30 October 2024 • 1 min read
Cash in Conversation: A poll for financial advisers

Cash in Conversation: A poll for financial advisers

Professional Adviser
clock 29 October 2024 • 1 min read
The challenges and opportunities for active managers

The challenges and opportunities for active managers

'We believe good active managers always have a place in a portfolio'

Darius McDermott
clock 29 October 2024 • 5 min read