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

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...

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Detalles Bibliográficos
Autores principales: Danthine, Jean-Pierre, Danthine, Samuel
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer International Publishing 2018
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6214293/
https://www.ncbi.nlm.nih.gov/pubmed/30443507
http://dx.doi.org/10.1186/s41937-017-0005-8
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author Danthine, Jean-Pierre
Danthine, Samuel
author_facet Danthine, Jean-Pierre
Danthine, Samuel
author_sort Danthine, Jean-Pierre
collection PubMed
description 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.
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spelling pubmed-62142932018-11-13 On the rewards to international investing: a safe haven currency perspective Danthine, Jean-Pierre Danthine, Samuel Swiss J Econ Stat Original Article 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. Springer International Publishing 2018-06-19 2018 /pmc/articles/PMC6214293/ /pubmed/30443507 http://dx.doi.org/10.1186/s41937-017-0005-8 Text en © The Author(s) 2018 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
spellingShingle Original Article
Danthine, Jean-Pierre
Danthine, Samuel
On the rewards to international investing: a safe haven currency perspective
title On the rewards to international investing: a safe haven currency perspective
title_full On the rewards to international investing: a safe haven currency perspective
title_fullStr On the rewards to international investing: a safe haven currency perspective
title_full_unstemmed On the rewards to international investing: a safe haven currency perspective
title_short On the rewards to international investing: a safe haven currency perspective
title_sort on the rewards to international investing: a safe haven currency perspective
topic Original Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6214293/
https://www.ncbi.nlm.nih.gov/pubmed/30443507
http://dx.doi.org/10.1186/s41937-017-0005-8
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