What Does Currency-Neutral Mean in Investing?

By Kristi Waterworth – Updated May 31, 2025 at 5:32 PM EST | Fact-checked by Frank Bass

Key Points

Using tools like forwards and options, currency-neutral funds hedge foreign-exchange risks.
Investing in currency-neutral funds can protect against losses from unfavorable exchange-rate shifts.
Currency hedging is essential for preserving investment gains in volatile foreign markets.

Conservative investors are often looking for more and better ways to hedge their risk against loss, including the use of currency-neutral funds, which can protect against risks that many people may have never even considered. Read on to better understand currency-neutral investing and how it works.

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A hand with fintech and global currency symbols surrounding a stock chart floating above it. — Image source: Getty Images.

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About the Author

Kristi Waterworth has been a contributing real estate and financial expert at The Motley Fool, covering real estate, investing, and personal finance topics, since 2020. Kristi has been interviewed by various TV media outlets and podcasts for her real estate investing expertise – from residential real estate to digital real estate and everything in between. Kristi’s journalist career spans over 25 years, and she has written about real estate investing, homeownership, and home construction specifically for the last decade. She was also previously a licensed Realtor and general building contractor before the Great Recession and housing market collapse. She holds a bachelor’s degree in American history from Columbia College in Missouri.

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Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.