Same Holdings, Five Currencies: What Changes for Your Plan?

First, keep the holdings fixed

We put the same illustrative allocation through Portfolio Lab’s current benchmark models in five base currencies: 80% global shares, represented by AC World Equity, and 20% gold. Both exposures remain unhedged. The weights never change. This is a comparison, not a recommended portfolio or an optimisation result.

Why not use a familiar 60/40 stock-and-bond portfolio? In the app’s current reference mapping, US aggregate bonds have a local-currency hedge outside USD. Comparing those defaults would change the hedge as well as the measuring currency. That can be useful, but it would answer a different question. Here we chose exposures with an unhedged version in every base.

One allocation, five views

The model gives the USD view a 7.28% annual compound return and 14.12% volatility, compared with 6.99% and 11.44% in GBP. The investments have not become different companies or a different metal. The base changes the return assumptions and how their price changes combine in that currency.

These figures are model outputs, not a historical performance table or a forecast of the next exchange-rate move. Volatility measures dispersion of returns; it is not the amount you are expected to lose, a maximum drawdown, or a probability of missing your goal.

Choose the currency of the commitment

A sterling house deposit and retirement spending in South Africa are different commitments. Start with the currency of the spending you want to fund, then test the portfolio against that commitment. Selecting the column with the highest nominal return does not create extra wealth.

The 8.67% rand result does not establish that the rand investor gains more purchasing power. Local inflation and future exchange rates matter. This table does not subtract inflation or model anyone’s spending basket, taxes or withdrawals.

Nor does lower modelled volatility make a portfolio safe for a near-term bill. If you have to sell on a particular date, the relevant question includes how much money could be available on that date and what else could fund the bill. Changing the display currency cannot remove that obligation.

A fund’s trading currency is another distinction. Buying an unhedged global fund quoted in pounds does not by itself hedge the businesses it owns. A currency hedge changes exposure and can involve financing and implementation costs. It is an investment decision, not a formatting choice.

What this model does and does not hold constant

Weights, asset definitions, the ten-year central scenario and the absence of hedges stay fixed. Expected returns, volatilities and correlations use the app’s corresponding base-currency model. Portfolio volatility uses the full covariance calculation, not an average of the two asset volatilities. Compound portfolio return is derived from weighted arithmetic returns and portfolio volatility.

This is not a controlled experiment changing only one FX assumption. The global-share payout model uses a relative purchasing-power-parity assumption with investor-currency inflation. The gold model instead assumes unchanged nominal exchange rates, uses a US-money-growth and valuation scenario, and includes a 0.4% annual holding-cost assumption. Those different conventions are part of the current app model; they should not be mistaken for one coherent forecast of all exchange rates.

The global-share model uses an August 2026 benchmark profile and a developed-world structural growth prior; emerging-market growth is not separately calibrated. Gold uses observed September spot and earlier published money data. The gold heuristic is not a validated causal forecast. Risk inputs and measured correlations have their own historical calibration, described in the methodology. General fund fees, investor taxes and personal cash flows are not modelled here.

Download the dated calculation evidence and source references. The live app can change as observations update; this article retains its snapshot.

Read the base-currency methodology, then test your own allocation in Portfolio Lab. Keep your spending currency and hedge choices explicit before comparing results.