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

Partner Insight: Navigating the Retirement Risk Zone

Partner Insight: Navigating the Retirement Risk Zone

Smoothed returns can play a crucial role in the approach to retirement, says Samantha Pardoe, senior investment development manager at Standard Life.

Sarka Halas
clock 26 February 2025 • 3 min read
PA Working Lunches: Long-term structural change with Scottish Mortgage

PA Working Lunches: Long-term structural change with Scottish Mortgage

Join us for an informative session worth one hour of CPD

Professional Adviser
clock 25 February 2025 • 1 min read
Partner Insight: How smoothed funds can meet clients' needs

Partner Insight: How smoothed funds can meet clients' needs

Andy Brown, head of fund solutions at Standard Life, explains what led the firm to create its smoothed fund proposition.

Sarka Halas
clock 21 February 2025 • 2 min read