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How Oakmark Puts a Currency Hedge On

The Oakmark manager explains the firm's policy of hedging only when the foreign currency looks 20% or more overvalued--and where their hedges are today.

How Oakmark Puts a Currency Hedge On
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John Coumarianos: I'd be remiss if I didn't ask you a question about currency, which we've discussed over the phone. But again, for the benefit of shareholders who when they own your funds are effectively exchanging their dollars for foreign currencies in some cases, how do you deal with the currency issue?

We hear from different investors, different strategies. Some foreign investors don't hedge back to the dollar at all, they just buy the foreign companies in their denominations, and then other, often value investors, like yourself, say, well we own businesses, and we don't want our returns to be affected by currency fluctuations at all. How do you fall on that?

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John Coumarianos does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.