Currency Considerations
All iShares listed on the ASX are unhedged. Therefore, for an Australian investor, who invests in an iShares ETF, there are three distinct determinants of performance returns:
1. The movement in prices of the underlying securities as managed by the fund manager
2. Fluctuations in the A$ rate of foreign exchange conversion with the currency (or currencies) of the underlying basket of securities
3. Fluctuations in the A$/US$ rate of foreign exchange conversion on cash amounts while the fund is processing distributions payments
All investors holding international assets within their portfolio via iShares will be subject to foreign currency exposure and will need to decide whether to hedge the resulting foreign currency exposure.
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