International Investing: Currency Hedging Performance

IDO has had a really good run, right?

It's historical returns are not, you know, indicative of future results, all that good disclosures, but you got to hand it dip your hat in terms of how they've performed um in their history here over the last three years.

They've really, you know, done quite well relative to the other two, but more importantly, relative to the benchmark.

Um, they've done that through some pretty aggressive tilts.

So, that introduces tracking error in that concept.

Um you know one thing I would note that I should have noted in exposure strategy is LBHI does um hedge out currency risk.

So um that was a benefit to it you know in years past as the dollar was stronger than a lot of your foreign currencies but this year it's been a hindrance to performance that is a big deal international investing um you know if you're going to hedge out currency risk um it can be a big driver of your overall return perspect perspective um I tend to think that if you're investing international part of the diversification is getting exposure to those currencies so I just wanted to throw that in there um it does show up in that return profile that that currency hedge hedging out the currency of the um of the portfolio.

But I think just you know on a look backward basis it's pretty obvious IDO is the winner right now.

On a look forward basis I I do think they've they've demonstrated the ability to navigate the markets.

Um they've got a little bit more of a growth tilt. uh long-term earnings of the underlying companies currently held in that portfolio is 3x that of LVHI and um Y.

So it's got that more growth tilt which I think kind of fits the dynamics of today's markets.

Um so just in general I I like that um performance risk and then yield.

Um yeah, I mean they're going to get you more income.

It's going to be a little bit tax different because they're generating off option incomes.

Um, the other two are going to get you a nice solid 4% uh, you know, qualified dividend income.

So, you really can't go wrong there either.

But just IDVO is my winner kind of across the board