Currency hedging
A mechanism (usually FX forwards rolled monthly inside the fund) that strips out the currency component of a foreign investment's return. You get the asset's performance in its local currency, regardless of what your own currency does. Hedging has a cost: a slightly higher TER plus a small "carry" tied to the interest-rate differential between the two currencies.
iShares offers a hedged version of the MSCI World (IWDE.AS) that costs ~0.20% more than the unhedged equivalent and removes EUR/USD swings.
Currency hedging
This term appears in a longer lesson, where the idea gets the proper treatment with examples and a working visualization.
Read the lesson →Trade-offs
Risk
The chance that an investment loses value, and how much it could lose.
Read →Volatility
How wildly an investment's price moves up and down. High volatility = bigger swings.
Read →Diversification
Spreading money across many different things so no single one can sink you.
Read →Bull & bear market
Long stretches of rising prices (bull) or falling prices (bear). Both end, eventually.
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