We can’t repeat often enough how important managing foreign currencies is in the context of managing a globally diversified investment portfolio. Despite this we are often surprised how many people, among them many so called investment experts, do not have any clue about this issue. About ten years ago, I was working as a foreign currency manager for one of the biggest U.S. firms. The company had huge foreign currency positions and even bigger operational money flows in those currencies. In order to protect profit margins, it was crucial to carefully manage the currency exposures. The impact from currency movements on the performance of a global investment portfolio is terribly important. U.S. investors and asset managers often overlook this factor, since they have a very strong home or U.S. Dollar bias. This practice can be quite dangerous, however, since we live in a world that is becoming increasingly “multi-polar” and where more and more money and power shifts to emerging economies. Further to this, there is a growing trend among major central banks (on whole the largest holders of Dollars) to restructure currency holdings in order to increase the diversification of their currency reserves. This will most likely add further selling pressure on the U.S. Dollar in coming years. What is a 5% investment return in U.S. Dollar worth when it is measured on a global scale? It is probably much less. This is especially so if we see increasing inflation and a weakening of the U.S. Dollar versus other major currencies. We believe that global diversification of investments and therefore investments in a range of non-U.S. Dollar currencies, is going to be a key driver of portfolio performance in coming years.