RT Journal Article
SR Electronic
T1 Managing Currency Risks for Global Families
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 76
OP 87
DO 10.3905/jwm.2010.13.2.076
VO 13
IS 2
A1 Joachim Klement
A1 Yves Longchamp
YR 2010
UL https://pm-research.com/content/13/2/76.abstract
AB In a world of increased mobility and globalized business, many families face increasing complexity in the area of currency risk management. This article describes the sources of currency risks for global families and suggests ways to manage them for both ongoing living expenses and cash flows as well as the long-term investment portfolio. In the presence of highly uncertain future consumption, hedging foreign currency risks may become less favorable and a more generic currency allocation to optimize long-term risk–return benefits may be applied. The authors test several of these approaches and find that a consumptionweighted currency basket or equal-weighted baskets may perform best.TOPICS: Currency, risk management, global, wealth management