Hedged Share Class

A version of a fund that uses currency hedging so investors' returns are largely unaffected by movements between the fund's holdings' currencies and the share class currency.

Example

The same global bond fund offered in an unhedged class and a class hedged to euros.

Important

Hedged and unhedged classes of one fund can deliver very different returns over the same period when currencies move sharply.

Related terms

• Currency Hedging — Using contracts such as forwards to reduce the effect of exchange-rate movements on foreign investments.
• Share class — One of several versions of the same fund portfolio, differing in fee, minimum investment, currency or whether income is paid out or retained.

Lessons that explain it

• Manage the currency risk you already have; think hard before adding more — For most investors, currencies belong in portfolio thinking as a risk to manage, not a market to trade. Leveraged currency trading has no natural place in a long-term plan. (8 min)

All 578 terms in the Investing glossary