Currency exposure

In this article we describe the currency fluctuations that can occur

Christoffer Falsen avatar
Written by Christoffer Falsen
Updated over a week ago

If you invest in an asset (loan notes) in a currency that is different to that of your home currency, your investment will be subject to currency fluctuations.

An example of how you are exposed to currency fluctuations by investing through Trine: If you are investing 100 Euros to an exchange rate of EUR/SEK 10.00, the initial investment value would be 1000 SEK. Excluding interest paid, once the loan is successfully repaid, the total value of your principal repayments is still 100 Euros. But at that time, the value of the Swedish Krona against the Euro might have changed, so the value in Swedish Krona could be higher or lower than the initial value of 1000 SEK. If the Swedish krona has depreciated and stands at 11.00 against the EUR, the value of your principal repayments in Swedish krona would then be 1100 SEK.

In the opposite direction, if the SEK has appreciated to 9.00 against the EUR, the value of your principal investment would be 900 SEK. While you can calculate the value of your Trine Portfolio in your home currency at any time, the actual profit/loss (if any) from currency fluctuations occurs once your funds are withdrawn and converted back to your home currency.

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