Emerging markets: Harnessing currency returns

The return potential from emerging markets currency

A large part of the return from investing in emerging market assets comes from currency exposure. However, Australian dollar investors typically lose out on this due to the economic links between Australia and Asia, and the impact of changes in commodity prices.

By separating the currency exposure into its three component parts and actively managing the part which provides unrewarded risks, we believe Australian investors can better capture the available returns from emerging market currency exposures, enhancing their overall return potential from emerging market investments.

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