In Investing, Money

Investing Series: What does Currency Neutral mean?

Currency neutral just means that it takes into account or “hedges” for your invested currency (your dollar).

Hedging means it accounts for any major spike or drop in the currency exchange rates.

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So, currency neutral versus “regular” funds means that you get the same set of returns from both funds, but one is hedged for let’s say, the Canadian dollar dropping overnight.

You will be safeguarded against that.

You will notice that the currency-neutral index fund has a slightly lower rate of return as a result versus the “regular” one, but it is supposedly “safer”, although what that really means, is another discussion.


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Sherry of Save. Spend. Splurge.

I got out of $60,000 of debt in 18 months using TheBudgetingTool.com. Since then, I have worked 50% of my career (taking 1-2 year breaks), and quadrupled my income within 2 years of graduating, going from $65K to $260K (savings rate = 85%). I could retire today if I wanted, but love my work-life balance as a freelancing consultant in STEM (Science, Technology, Engineering, Math). I also post daily on Instagram @saverspender.

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