On the rewards to international investing: A safe haven currency perspective

Artikel

The safe haven property of the Swiss franc presents a specific challenge for internationally minded Swiss-based investors. The central issue is whether the traditional under-performance of Swiss assets is made up by the secular appreciation of the Swiss franc combined with the propensity of the safe haven to strengthen in times of market stress. In this paper, we review the evidence on the terms of this challenge. We conclude that a Swiss bias in asset allocation can lead to considerable return shortfalls over the long run and that systematic currency hedging would not have been historically justified and is unlikely to be in the future. Assuming a fair amount of currency risk thus appears inevitable for long-run Swiss-based investors.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Swiss Journal of Economics and Statistics ; ISSN: 2235-6282 ; Volume: 154 ; Year: 2018 ; Issue: 1 ; Pages: 1-16 ; Heidelberg: Springer

Classification and Topics

• Classification: Wirtschaft ; International Finance: General ; Foreign Exchange ; Portfolio Choice; Investment Decisions
• Subject: Uncovered interest parity ; Safe haven currency ; Currency hedging

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Danthine, Jean-Pierre ; Danthine, Samuel
• Event: Veröffentlichung
• (who): Springer
• (where): Heidelberg
• (when): 2018

Further information

• DOI: doi:10.1186/s41937-017-0005-8
• Handle: http://hdl.handle.net/10419/259712
• Last update: 10.03.2025, 11:44 AM CET