Currency Considerations for International Investors in 2023

In 2023, exchange-rate movements can affect the returns experienced by international investors. An investment may perform well in its home market while producing a different result once translated into the currency the investor actually uses.

Begin with future liabilities

The currency of future spending is an important starting point. Someone expecting to retire in the euro area may view currency exposure differently from a person planning future costs in sterling or US dollars. Holding assets in several currencies can diversify exposure, but it can also introduce additional volatility.

Income payments deserve similar attention. A regular coupon or dividend may be predictable in one currency yet fluctuate after conversion into another.

Hedging has trade-offs

Currency-hedged investments may reduce some exchange-rate movements, but hedging has costs and cannot eliminate every source of risk. Whether it is useful depends on the asset, the investor’s base currency, time horizon and the purpose of the holding.

Tax and regulation remain local

International clients also need to consider residence, tax status, local rules, product availability and provider eligibility. Accessing a website from a country does not mean every service or product can be offered there.

In 2023, the practical approach is to treat currency as part of the investment decision—not as an afterthought once a product has already been selected.

This article is for general information only. It is not personal investment, pension, legal or tax advice. Appropriate decisions depend on individual circumstances, objectives, time horizon and attitude to risk.