International records / OpenAlex research

Impact of Foreign Exchange Risk on the Performance of Global Portfolios

Nigerian investors diversifying into international markets face a significant obstacle in the form of foreign exchange risk, but there is a startling lack of empirical data on its effects. This study closes this gap by carefully examining the impact of Naira volatility (NGN/USD, NGN/GBP, and NGN/EUR) on the risk-adjusted performance of international portfolios. We use comparative hedging simulations and multivariate regression using monthly data from 2010–2023, which includes Nigeria’s 2016 capital liberalisation, several currency crises, and the 2023 Naira float. Key findings show that oil pr…