Should you hedge foreign currency exposures?
SUMMARY
INTRODUCTION
For U.S.-based investors, international equities offer compelling opportunities. The S&P 500 currently trades at a trailing price-to-earnings (P/E) ratio of 32.9x, significantly higher than the MSCI Europe at 22.6x and MSCI Japan at 16.3x. While valuation is an important metric, it is not the only one -earnings growth in the U.S. has outpaced that of other regions, which may help justify these elevated valuations.