Ben Raven, Head of Business development at Tavistock Wealth Ltd, tells Proactive the last 20 years has seen a fundamental shift away from financial advisers recommending UK-centric portfolios to a globally diversified approach.
He adds that this shift brings with it an increase in the average client’s exposure to overseas markets and in turn the currency markets.
Raven claims this exposure and the impact it can have on a client’s returns and their volatility that is often overlooked or at times misunderstood.
”Some mistakenly believe if you hold any foreign investments via a sterling share class then you are somehow immune to the impact of the currency markets which is not the case. If we were to hold, for example, a Sterling share class of a dollar-denominated investment such as a US equity fund, we would be exposed to that US equity market and the Sterling/Dollar currency pair”, Raven says.
Story by ProactiveInvestors