Jeremy Schwartz - "You Should Be Hedged a Lot More Than You Are" | #26
If you’re ready to dive straight into the deep end, Episode 26 is for you. The guys waste no time, starting off with complicated topic of currencies. Jeremy takes issue with the currency-stance belonging to some former, unnamed Meb Faber Show guests. Specifically, he challenges the idea that currency hedging is expensive. Not true, he says. It’s only “selectively” expensive. You can actually get paid to hedge certain currencies. He gives us more details, leading to his overall takeaway: You should be hedged a lot more than you are.
Key Points
- Currency hedging is a misunderstood concept in investing, with many believing it to be expensive, when in fact, it can often be cost-effective or even profitable, depending on the interest rate differentials between countries.
- Factor exposure in bond indexing is an area ripe for innovation, with strategies emerging that move away from traditional market cap weighting to potentially enhance returns by focusing on yields and quality factors.
- Dividends and buybacks should be considered together as "shareholder yield" to evaluate a company's return to investors, with buybacks playing a significant role in boosting future dividend growth and overall returns.
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Resources: Big Mac Index Dividends, Buybacks and the Prospect of Future Returns - WisdomTree The Forgotten Dividend Payers: Mid- & Small-Cap ... - WisdomTree Three Approaches to International Small Caps: A 10-Year Retrospective The Right Time for Dynamic FX Hedging | WisdomTree ETF Blog DB Currency Returns
Chapters
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| 20:30 | |
| 25:25 | |
| 28:49 | |
| 37:26 | |
| 39:52 | |
| 42:49 | |
| 46:19 |
Transcript
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