The Guessing Game Called Hedging

U.S. investors in the Warburg Pincus Japan OTC and the DFA Japanese Small Company funds were taken on a roller-coaster ride last year. In the first half of 1995, the Warburg Pincus fund plummeted 24.61%, and the DFA fund fell 16.19%. Warburg Pincus rebounded the following six months, up 31.22% from July 1, and DFA bounced back with a 15.06% gain. Behind the dramatic difference in results between the funds: currency exposure.

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