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Nearly every mid-sized fund manager in North America is now actively hedging currency risk, a sharp jump that reflects just how nervous the institutional investing world has become about geopolitics, trade wars, and central bank unpredictability.
A survey conducted by financial technology and cash management firm MillTech found that 94% of US and Canadian fund managers are hedging their forecastable foreign exchange exposures. That’s up from 85% just a year earlier. The survey, conducted in June 2026, captured responses from 250 firms managing between $500 million and $20 billion in assets.
The cost of doing nothing
A full 97% of the managers surveyed said they had suffered losses from unhedged FX exposure, with the average hit coming in at $731,000.
More than half the respondents said they plan to extend the length of their currency hedges going forward. Roughly 63% identified longer hedge tenors as a necessary adjustment given the current volatility landscape.
The drivers behind the shift are a familiar cocktail: geopolitical uncertainty, escalating trade disputes, shifting central bank policies, and Middle East instability.
What’s particularly interesting is the size dynamic. Smaller funds, those managing between $500 million and $1 billion, are hedging at 98%, compared to 88% for larger funds.
What this means for markets
The extension of hedge tenors is equally telling. When managers are locking in longer-dated hedges, they’re signaling they don’t expect volatility to resolve quickly.
One implication worth watching: as hedging costs rise with demand, fund managers face a squeeze on returns. FX hedging isn’t free. The cost of rolling forward contracts, particularly when interest rate differentials between countries are wide, eats directly into performance. Managers are essentially choosing a known cost over an unknown risk.
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