So far in 2025, most major currencies have appreciated against the US dollar - from around 5% for the AUD to 17% for the SEK. The GBP has risen nearly 9%, and the EUR is up approximately 12% at the time of writing. This broad-based dollar weakness has brought currency risk back into sharp focus - particularly for investors who have benefited from unhedged equity exposure in recent years, as USD strength previously enhanced returns when converted to local currency.
Currency markets remain notoriously difficult to forecast - with major trading platforms such as IG, Trading212, and eToro issuing prominent risk warnings for retail investors.
In this issue, we reaffirm a time-tested approach: hedge currency risk in the bond allocation, while maintaining unhedged exposure on the equity side — and one that’s proving its value in the current environment.
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