Currency risk
Buying a world fund in euros still means owning dollars, yen and pounds. Their moves against the euro become yours.
Where the money is
About seven tenths of a world share index is US companies. Their value is in dollars. If the dollar falls against the euro, that part of your fund is worth fewer euros, even if US shares did not move.
It happens
In 2025 the dollar lost more than a tenth of its value against the euro. A euro investor in US shares saw a good year in dollars turn into a much smaller one in euros.
Hedging
Some funds offer a “hedged” class that removes most currency moves. It costs roughly the difference between interest rates in the two currencies, which can be a point or two a year, and it takes away gains as well as losses.
Over long periods
Over many years currency moves have tended to even out for share investors, but not always and not on any timetable. For money you will spend in euros soon, currency risk matters more.
Key takeaways
- A euro-listed world fund still holds foreign currencies.
- A weaker dollar lowers your US part in euros.
- Hedging removes moves both ways, at a cost.