Pathfinder Monthly Commentary: Don’t hedge currency exposures – part 2

Given the investment impact, hedging should be a topic at the forefront of discussions on markets and portfolio construction. Last month we served up 5 of the most common reasons for not hedging.  This month we look at 5 more.  By way of reminder, last months’ arguments were don’t hedge because….

1. there’s extensive research telling us not to hedge
2. hedging is a “zero sum game”
3. hedging currency is expensive
4. in the long run the NZ dollar is depreciating
5. ignoring currency lets me avoid the hedging debate

Below are reasons 6 to 10:

Reason 6 - don’t hedge because…. there are no hedging tools available