Funds in Focus

Handle the foreign currency risk

30.03.2016

Due to currency fluctuations, investing abroad can greatly impact your returns if not handled well. This is even more relevant today, in increasingly volatile, and therefore unpredictable, financial markets driven by central banks' monetary interventions.

Imagine, as a Swiss investor, you invest in a Luxembourg-based EUR denominated fund, in a CHF share class. If the CHF depreciates vis-à-vis the EUR, your return will be negatively impacted by this depreciation. To avoid this, one solution is to choose CHF-hedged share classes.

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The purpose

  • Hedged share classes are aimed at providing investors with a return correlated to the base currency performance of the fund by reducing, but not eliminating, the effect of exchange rate fluctuations between the base and the hedged currency.

How it works

  • Our hedging is carried out by executing a one-month forward FX contract: every month, we sell the base currency to buy the hedged currency. This hedging allows Swiss investors to stick to the CHF while mitigating currency risks brought by investing in a fund denominated in another currency than the CHF.

Our offer

  • In order to reduce the currency effect while enjoying our Fund range, Carmignac provides you with CHF-hedged share classes for all equity, diversified and fixed income sub-funds of Carmignac Portfolio (Luxembourg SICAV). Discover our CHF-hedged share classes