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Currency hedging international equities

Global/hedging · 2014 to 2026 · MSCI and UBS · 4 sources · data as of 1 Aug 2026

If you're an American buying Japanese or European shares, you've bought two things and not one. You've bought the shares, and you've bought the currency they happen to be priced in. Hedging is the decision to keep the first and get rid of the second. Most people holding an international fund have made that decision without ever thinking about it, because the fund made it for them.

This page shows what that choice actually did, year by year, for a dollar investor. MSCI publishes hedged, local currency and unhedged returns for the same index on the same document, which turns this from an argument into a table you can read. Twelve calendar years of it, the long run comparison back to 2001, and what the academic work says about how much risk currency adds in the first place. I built it because hedging gets debated in the abstract far more often than it gets measured.

The short version, and it's on the page in more detail: over a full cycle hedging did almost nothing to returns and a real amount to the size of the swings. The links at the bottom go to the actual MSCI factsheets. They're PDFs and they're dry, but the calendar year table is right there on one page if you want to check a single row against what I've written.