Currency hedging: should you protect your overseas investments?

18 snips

Jul 21, 2025

In this discussion, Cameron Gleeson from BetaShares, a leading expert on currency and investments, explores the intricacies of currency hedging for Australian investors. He breaks down what currency hedging means and how the AUD/USD exchange rate impacts returns. Gleeson distinguishes between hedged and unhedged ETFs, explaining why hedging can reduce volatility. He also offers insights into tax implications and shares strategies for managing risk, providing valuable tips for anyone with a global investment portfolio.

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INSIGHT

What Currency Hedging Actually Does

Currency hedging removes Australian dollar FX moves from overseas asset returns.
It aims to replicate the return an investor living in the asset's home currency would see.

INSIGHT

FX Can Erase Asset Gains

FX moves can materially change your AUD returns even if foreign asset prices don't move.
An appreciating AUD reduces AUD value of unchanged US-dollar assets and vice versa.

ANECDOTE

NDQ Investors Won From AUD Depreciation

NDQ is unhedged so Australian investors also captured a 10-year AUD depreciation tailwind.
That currency tailwind significantly boosted AUD returns from US equities over the decade.

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