Currency hedge carry calculator
Work out the invisible cost of currency-hedging a fund: the interest-rate gap baked into the hedge, in percent and in cash, over the years you plan to hold, and whether the hedge quietly pays you instead.
Currency hedge carry calculator
The value of the fund (or slice) whose currency you are hedging.
An editable illustration, not a rate on offer. The ECB deposit rate was 2.25% in July 2026; a sterling reader would use the Bank of England's rate. Set your own.
The policy rate of the currency you are hedging away. For dollars, the US Fed's target range was 3.50% to 3.75% in July 2026 (midpoint 3.625%). Use the currency you actually hedge.
How long you expect to hold. The carry is a yearly drag; over a long hold it quietly adds up.
Advanced options
Leave at 100 for a fully-hedged fund. If you are only hedging the dollar slice of an unhedged fund, set it to that share, roughly 70% for a typical world tracker.
--
--
--
--
This is the carry on one currency, usually the dollar. A world fund hedges several, and some currently pay you to hedge, so a real fund's blended drag can run a little lower.
These figures are an illustration you built from today's rates, not a forecast and not a rate on offer.
Investment values can fall as well as rise, and the carry itself moves with every central-bank decision, so it is not a fixed feature.
What you actually keep depends on the fund's real performance and charges, and on where rates go next.
What this tool does
A currency-hedged fund carries a cost that never appears in the fee: the carry, the gap between your currency's interest rate and the hedged currency's, baked into the rolling monthly forward. This tool derives that carry from the two policy rates you can look up, and shows it in percent and in cash, over the years you plan to hold.
How this calculator works
This calculator works out the currency-hedge carry as the pure interest-rate difference between two policy rates: the carry is the hedged currency's rate minus your own currency's rate, exactly as the underlying explainer does. It does not use forward points or covered interest parity, because a static page cannot pull live currency-market data and a forward-points figure would contradict the policy-rate method. It applies that carry to your holding, scaled by the share exposed to the hedged currency, projects a flat cumulative drag over your horizon with no growth assumed, and expresses that drag as the size of an equivalent one-off currency move. Hedging a higher-yielding foreign currency back into a lower-yielding home currency costs you the gap; when your home rate sits above the hedged currency's, the hedge pays you instead. The figure is for one currency, usually the dollar; a fund that hedges several currencies has a blended drag that can run a little lower. Every rate is an editable assumption you set, and the tool names no fund, share class, provider, or index and never tells you whether to hedge.
When to use it
Reach for it when you are weighing a hedged share class against its unhedged twin and want to see the real cost, the carry, rather than the tiny published fee gap. It is a cost estimate for one currency, not a recommendation to hedge or not.
This calculator gives educational guidance, not financial advice. It works out the interest-rate carry of hedging one currency and names no fund, share class, provider, or index. It does not model forward points, market crashes, or the sign of a currency move; the rates are editable assumptions you set. It does not tell you whether to hedge. For decisions about your own money, talk to a regulated adviser in your market.