Currency Hedging Programs: A Long-Term Perspective
11 Pages Posted: 20 Jun 2008 Last revised: 1 Sep 2009
Date Written: April 1, 2007
This article addresses currency performance over extended periods of time, and examines the potential implications for investors considering implementation of a currency hedging program. While currency movements have tended to be mean-reverting, there have been extended periods of positive as well as negative impact for investors. By reviewing historical returns, the paper highlights the behavioral considerations that may influence the effectiveness of hedging programs.
Keywords: currency, hedging, investors, currency movements, investment, currency returns, hedging programs
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