SOURCE: Russell Investments

Russell Investments

February 19, 2015 13:37 ET

Currency Effect: Stronger U.S. Dollar Means Weaker Global Indexes Year-to-Date Without a Currency Hedging Strategy for U.S. Investors

SEATTLE, WA--(Marketwired - Feb 19, 2015) - The Russell Developed ex-U.S. Index, on a currency hedged basis, has returned 5.6% year-to-date as of February 13, as compared to the 3.2% return of the Index on a total return basis for the same time period*. 

*Source: Russell Investments. Currency hedging is the act of entering into a financial contract in order to protect against unexpected, expected or anticipated changes in currency exchange rates.

Tom Goodwin, PhD - Senior Research Director, Russell Indexes
"The strengthening U.S. dollar certainly offers benefits for U.S. consumers purchasing foreign goods, but can have quite a negative effect on U.S. investors investing outside the U.S. The comparative U.S. dollar hedged and unhedged returns of the Russell Developed ex-U.S. Index year-to-date help illustrate that investors can no longer think solely in terms of their own currency, but need to be mindful about what is going on with currency rates in the markets they invest."

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Please note: Indexes are unmanaged and cannot be invested in directly. Returns represent past performance, are not a guarantee of future performance, and are not indicative of any specific investment.

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Opinions expressed by Mr. Goodwin reflect market performance as of February 13, 2015 and are subject to change at any time based on market or other conditions without notice. Past performance does not guarantee future performance. 

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