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Gold is supposed to be a hedge against calamity, but this year it generated its own brand of pain as it plunged 26 per cent.
Gold is supposed to be a hedge against calamity, but this year it generated its own brand of pain as it plunged 26 per cent.
(LEONHARD FOEGER/REUTERS)

This year’s lesson for Canadian investors: Hedging can hurt

Exchange-traded funds have made it easy for investors to protect themselves from foreign currency fluctuations with so-called “hedged” products, but Canadian investors aren’t going to celebrate this accessibility as the year winds down. That’s because 2013 was a dismal year for hedging.

The best-known hedged ETFs in Canada are those that track U.S. and foreign stock market indexes but do so in Canadian dollar terms.