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The Short Answer

Should I Take the Plunge Into Currency-Hedged ETFs?

Trying to time your portfolio's currency exposure could cost you money.

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Question: I’m interested in getting international exposure, but I’m not interested in taking on currency risk. Is a currency-hedged ETF the way to go?

Answer: There are valid reasons to invest in either currency-hedged or unhedged foreign-stock funds. The danger comes in trying to predict periods of relative strength for the U.S. dollar, and buying and selling hedged and unhedged funds in response. For most long-term investors the best strategy is finding either a currency-hedged or unhedged fund with solid fundamentals, and sticking with it through thick and thin.

Karen Wallace does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.