How are individual stock markets performing this year? Figure 1 shows year-to-date returns for selected indices in local currency. All three main indexes of the Hong Kong Stock Exchange are in the red.
The best performers are European (+12.2%) and Japanese (+21.8%) stocks.
The situation changes slightly when we compare the rates of return in the US dollar (without hedging) - Figure 2. Nikkei is only +13%, and the difference between American and European shares is small.
For an investor from the euro zone, the rates of return expressed in euro are shown in Figure 3. An investor from the euro zone did best this year if he bought American shares and did not hedge the currency, and when he bought Japanese shares and hedged the currency!
Bonus chart – Figure 4 shows the Nikkei 225 index returns in various currencies since the beginning of 2022.
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