Which currencies do you depend on?

The fund's currency is not your exposure

An MSCI World ETF bought in euros in Amsterdam still holds American, Japanese and British shares inside. If the dollar falls, you lose, even though the number on your broker's screen is in euros. The share class's currency is how you are billed; what you depend on is what is inside.

To fill this page in properly with a global fund, look at its prospectus or factsheet: the split by country or currency is there. Put one line per currency with its share. If you put a single line in euros, the number you get will be false and reassuring, which is the worst combination.

Hedged share classes

A class with "EUR hedged" in its name does cover much of this risk, but it is not free: hedging has a cost that comes out of the return, and that cost rises when the two currencies' interest rates move apart. If your class is hedged, count it in your own currency.

What this does NOT say

It does not say whether you should hedge. Over long horizons some argue currency evens out and hedging only adds cost; over short ones, it moves for real. Here we measure how much it moves you, and deciding is yours.