We believe that, as a result of ECB action, a weaker euro can help stimulate economic growth, overcome deflationary pressures and ultimately improve the lingering debt sustainability issues plaguing peripheral European countries. In advance of these potential outcomes, we continue to advocate that investors hedge currency risk in their international portfolios via currency-hedged equity strategies or bullish U.S. dollar strategies.
1Source: Bloomberg, as of 12/31/14.
2EUR/USD was trading near 1.313 as of 8/29/14.
3Source: Goldman Sachs, as of 1/9/15.
Important Risks Related to this Article
Foreign investing involves special risks, such as risk of loss from currency fluctuation or political or economic uncertainty. Investments in currency involve additional special risks, such as credit risk and interest rate fluctuations. Investments focused in Europe are increasing the impact of events and developments associated with the region, which can adversely affect performance.