Macro Matters is a global investment blog brought to you by LGIM’s Asset Allocation team. We’re focused on sharing our most compelling thinking to help you become more informed investors.
Political risk is back with a vengeance in Italy. As the third largest global issuer of government bonds after the US and Japan, the country is too big to be allowed to fail without severe contagion to the global financial system. However, it is also too big to bail out comfortably using tried and tested mechanisms.
Some investors propose hedging all currency exposure while others see no benefit to hedging at all, so is currency exposure a risk?