Impact of Exchange Rates
Currency movements can present an element of uncertainty for Canadian
investors holding foreign mutual funds in their portfolios. During the 1990s
a declining Canadian dollar added to the returns of mutual funds that invested
in foreign markets. This pattern reversed in 2003 when a soaring Canadian
dollar began negatively impacting reported returns on foreign investments,
particularly U.S. equity funds.
This section explains the effects exchange rate movements have on
mutual funds that hold foreign securities. It also discusses how
exchange rate risks can be mitigated through currency hedging, and
how investors should view currency within their portfolios.
Learn more about the impact of currency movements and exchange rates on your investments:
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