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International Portfolio and Currency Rates

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International Portfolio and Currency Rates

Hi MM, If, as implied, interest rates in Australia rise while those internationally fall, the A$ should rise. How do you account for the impact this may have on the performance of your international portfolio? Regards, Peter

Answer

Hi Peter,

The performance of the International Equities Portfolio would be negatively impacted in that scenario. The performance we quote does take into consideration the currency impact. We like the concept of having some currency exposure for Australian investors. When combined with domestic assets, this works to smooth returns over time. We do not typically hedge currency.

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