When reviewing global stocks’ 2025 performance, some Canadian investors may have questions about their returns. Many American financial publications Fisher Investments Canada reviews touted global stocks’ 21.1 per cent return in U.S. dollars (or U.S. stocks’ similar 18 per cent), yet Canadian investors saw a 15.4 per cent global market return in Canadian dollars.i This gap is largely tied to currency swings, and stretches like 2025 can make owning non-Canadian stocks seem more of a burden than aid – especially when the S&P TSX trounces that return, like last year. However, investors benefit from putting currency swings’ effect on international stock returns in perspective, as doing so shows the positives of investing globally.
When investors buy international stocks, they reap the stock’s return in its home currency, plus or minus that currency’s move against the investor’s home currency. While currencies aren’t market drivers – i.e., they aren’t inherently beneficial or negative for stocks – Fisher Investments Canada’s reviews of market history show currencies’ fluctuations often appear in investment returns.
For example, if a Canadian investor owns U.S. stocks and the loonie weakens (depreciates) against the U.S. dollar, it means U.S. dollars buy more loonies – adding to their return. And, of course, vice versa. Thus, currency swings can yield varying returns depending on the investor’s home country and stock exposure. The U.S. dollar’s fall against the loonie in 2025, which weighed on Canadian investors’ returns on their U.S. stocks, is a recent example of this.ii
Yet these swings move in both directions. For instance, in 2022, the U.S. dollar rose against Canada’s.iii This benefited Canadian investors’ returns on their U.S. holdings, as the MSCI World Index fell just 12.2 per cent in CAD that year – a bit better than its -18.1 per cent return in dollars.iv Or in 2024, when U.S. investors earned solid 18.7 per cent MSCI World gains in USD, but that paled against Canadian investors’ 31.3 per cent in CAD in the same index.v
Now, Fisher Investments Canada’s reviews of investor behaviour suggest these short-term swings can tempt investors to concentrate in their home country’s stocks. Missing out on returns due to currency swings might be frustrating, so it may seem sensible to own only domestic stocks and avoid currency skew altogether. Yet, importantly, our historical studies show currency effects mostly even out in the long term. Exhibit 1 helps show this, charting MSCI World returns in several major currencies since 2020.
Exhibit 1: Currency skew evens out in the long term
Source: FactSet, as of Jan. 8, 2026. MSCI World Index price level in U.S. dollars, euros, pounds and Canadian dollars, Dec. 31, 2019 – Dec. 31, 2025. Price returns used in lieu of returns with net dividends due to daily data availability.
As this shows, these major currencies experienced stretches of relative appreciation and depreciation, like the euro’s and pound’s rising over U.S. and Canadian dollars in 2022 – and vice versa in 2025. Yet, over the span of five years, they ended up roughly in the same place. This helps disprove the notion currency swings are a big negative for long-term investors. Their long-term effect tends to even out.
Understanding this can help investors stick with owning international stocks, which is worthwhile since the benefits from a global investment approach outweigh issues such as currency swings’ short-term hit on returns. Diversification is one key reason. Consider that those investing only in Canadian stocks concentrate in areas such as financials, energy and materials, which dominate TSX market capitalization. That means investors likely miss out on huge swaths of the global stock market, such as information technology and communication services, which don’t have as large a footprint in Canadian markets relative to America or some Asian nations – weighing on returns if these sectors lead broader markets.vi
Plus, understanding currency effects help investors understand their returns’ drivers. For example, if an investor’s home currency appreciates against another and that investor owns lots of stocks in that foreign country, they can temper their expectations and mitigate their disappointment – and vice versa if their home currency depreciates. Those who don’t understand currency skew might link other factors to their disparate returns and react accordingly – a potential precursor to portfolio mistakes.
For these reasons, we think investors benefit from accounting for currency swings when reviewing their returns. Having a better understanding of why one’s portfolio behaves the way it does is key to remaining patient and disciplined while investing for the long term – one of many keys to success.
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i Source: FactSet, as of Jan. 8, 2026. MSCI World Index return with net dividends in USD and CAD, S&P 500 total return in USD, Dec. 31, 2024 – Dec. 31, 2025.
ii Ibid.
iii Ibid. Statement based on USD/CAD exchange rate, Dec. 31, 2021 – Dec. 31, 2022.
iv Ibid. MSCI World Index return with net dividends in USD and CAD, Dec. 31, 2021 – Dec. 31, 2022.
v Ibid. MSCI World Index return with net dividends in USD and CAD, Dec. 31, 2023 – Dec. 31, 2024.
vi Ibid. Statement based on MSCI Canada Index sector weightings.
Investing in financial markets involves the risk of loss and there is no guarantee that all or any capital invested will be repaid. Past performance is no guarantee of future returns. The value of investments and the income from them will fluctuate with world financial markets and international currency exchange rates. This document constitutes the general views of Fisher Investments and should not be regarded as personalized investment or tax advice or as a representation of its performance or that of its clients. No assurances are made that Fisher Investments will continue to hold these views, which may change at any time based on new information, analysis or reconsideration. In addition, no assurances are made regarding the accuracy of any forecast made herein. Not all past forecasts have been, nor future forecasts will be, as accurate as any contained herein.
Fisher Investments Management, LLC does business under this name in Ontario and Newfoundland & Labrador. In all other provinces, Fisher Asset Management, LLC does business as Fisher Investments Canada and as Fisher Investments.
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