US investors exposure to non-US assets has grown but their approach to managing currency risk has not kept pace and remains outdated and often unmanaged , Historically US investors have exhibited a strong home bias allocating the majority of their investments to USD-denominated assets Consequently currency risk within their portfolios was often overlooked Over the past 20+ years though this home bias has diminished significantly and exposure to non-US assets has grown  According to a study by the Center for Retirement Research at Boston College non…, Risk and Return, Table 1 below illustrates the risk and return metrics for the MSCI EAFE Index comparing unhedged and hedged portfolios Across all time periods the annualized risk of the hedged portfolio was consistently lower than that of the unhedged portfolio Moreover the annualized returns of the hedged portfolio were higher leading to improved risk-adjusted returns for investors who chose to hedge their…, Annualized returns, Annualized volatility, Time period, MSCI EAFE unhedged 2, MSCI EAFE USD hedged, MSCI USA 3, MSCI EAFE unhedged, MSCI EAFE USD hedged, MSCI USA, 3 years 415% 1068% 1045% 1701% 1144% 1762% 5 years 589% 1005% 1528% 1784% 1366% 1847% 10 years 507% 878% 1274% 1526% 1248% 1554% 20 years 516% 764% 1012% 1674% 1345% 1513% Source Bloomberg | 1 Time period ending 30 Nov 2024 | 2 The MSCI EAFE Index is a stock market index that is designed to measure the equity market performance of developed markets outside of the US & Canada | 3 The MSCI USA…, Currency impact, Investors have traditionally allocated to non-US assets for several key reasons including diversification growth opportunities and risk management The return profile of these investments comprises two components the return of the underlying asset and the impact of currency fluctuations relative to the US dollar In recent years unhedged non-US equities have underperformed compared to the US equity…, Time period, MSCI EAFE unhedged, MSCI EAFE USD hedged, MSCI USA, 3 years 024 093 059 5 years 033 074 083 10 years 033 070 082 20 years 031 057 067 Source Bloomberg, Hedging assumptions, Other reasons US investors have historically avoided hedging currency risk aside from their home bias include  The belief that currencies tend to mean-revert over the long term The perception of diversification benefits and Concerns about hedging costs  However these assumptions warrant closer examination As noted earlier the home bias among US investors has declined significantly in recent years…, Portfolio insurance, On the other hand hedging currency risk offers tangible benefits By hedging to US dollars investors effectively gain a form of natural portfolio insurance reducing exposure to currency-driven volatility Importantly the cost of hedging is minimal Annual trading costs typically amount to just a few basis points  Additionally over the past 20 years US investors who hedged currency risk would have…, Explore more currency insights, Four strategies to reduce liquidity management stress, Different approaches can help investors manage the liquidity challenges associated with their currency program  Read article, Safe haven currency hedging, Why do US and Swiss pension funds use different currency risk strategies Read article

Excess liability insurance can make a big difference should you ever find yourself faced with legal action Liability insurance is not a one-size-fits-all solution and should be approached with thoughtful and careful planning Depending on their unique circumstances our clients tend to carry between $1 million and $10 million in excess liability coverage, It’s a good idea to discuss any significant lifestyle changes in the last year – or contemplated changes – with your wealth advisor at least annually One good reason is to ensure your excess liability insurance reflects the exposure to risks you may not have considered or anticipated Without comprehensive liability coverage your savings investments and even your future income may be subject to…, Do you own a pet , Dog bites account for more than one-third of all homeowners’ insurance claims¹ and if the claim exceeds the coverage limit the dog owner is personally responsible for all damages above that amount including legal damages, Have your children reached any milestones that should cause review, Once children start driving move away to college or even spend time online claims and lawsuits can often exceed homeowners’ and auto liability limits very quickly Cyberbullying and toxic tweeting lawsuits can turn ugly, Have you recently hired domestic employees, Domestic employees working in or around your property could injure themselves leaving you in a vulnerable situation, Do you have a new boat car or recreational vehicle such as a snowmobile or ATV, These should be taken into account as increased opportunities for risk as medical care and property damage due to vehicular accidents can run into the millions of dollars, Have you begun hosting social events in your home on a regular basis, As more people spend time in your home the likelihood increases that someone could become injured in your home, Have you installed a swimming pool a trampoline a tree house or a playset, All of these are potential dangers capable of adding to your risk profile Finding the right financial balance doesn’t have to be time-consuming or stressful Your Mesirow wealth advisor can help by working with your current provider and with other professionals who specialize in personal property and casualty insurance to ensure that all facets of your financial plan work seamlessly together, Published January 2025, 1  Insurance Journal  Mesirow maintains a financial interest in a strategic relationship with Alliant/Mesirow Insurance Services

Doug Brookman is a Managing Director in Mesirow Investment Banking He is responsible for managing the team’s financial sponsor coverage Doug has 10 years of financial services experience including asset based lending and private equity Prior to joining Mesirow in February 2021 he served as Head of Business Development at Pacific Avenue Capital Partners Before that Doug worked in business…

Doug Barker is a Senior Managing Director in Mesirow Sale-Leaseback Capital In this capacity he is responsible for national business development and acquisitions sourcing in excess of $3 billion of net leased assets  Doug contributes to the collective strategy of Mesirow Realty Bridge Equity utilizing his experience in real estate lending and is a member of its Investment Committee    Doug has…

Duane is a Managing Director in Mesirow Institutional Sales & Trading He focuses on a broad range of fixed income securities Duane has over 30 years of experience in fixed income sales covering both large and middle-market sized accounts Prior to joining Mesirow in 2024 he worked at InspereX (formerly 280 Securities He also held various sales positions at Cantor and RBC Capital Markets Duane…

Dylan Abbott is a Vice President in Mesirow Investment Banking He is responsible for supporting senior bankers and clients throughout the transaction process and providing valuation analyses and advisory services for transactions across a wide range of industries These industries include aerospace and defense business services consumer and retail distribution and supply chain food beverage and…