Canadians who invest in global securities are exposing themselves to a foreign currency exchange risk that could have a material impact on their retirement savings, warns Criterion Investments Ltd

Statistics Canada recently announced that Canadians have continued a trend of heavy foreign purchases this year, acquiring foreign securities totalling $38.7 billion from January to June 2006.

“With the lifting of restrictions on foreign content in RRSPs, investing internationally is growing in popularity and is an excellent way for Canadians to diversify portfolios,” says Ian McPherson, president of Criterion. “However, traditional global investing introduces a risk that is rarely articulated, probably because there has been a lack of solutions in the past.”

“While it makes sense to invest globally, it doesn’t make sense for Canadians to take on future foreign exchange rate risk,” says McPherson. “The recent rise of the Canadian dollar has shown that there is a real risk that Canadian retirement savings in global equities could be negatively impacted 10%, 20%, 30% by multiple foreign exchange rates – a risk factor beyond their control.”

“The solution is to protect foreign investments by selecting currency-hedged investments that lock-in the current Canadian exchange rate. That way you only need to focus on investment performance,” adds McPherson. “For those who say the Canadian dollar is likely to weaken, I would ask if they are 100% sure.”

Criterion launched Canada’s first family of currency hedged solutions in June 2006. Criterion Currency Hedged Funds provide Canadians with a simple way to invest in certain international assets, such as equities and commodities, while substantially mitigating the risk associated with currency exchange rates.

Following a positive response from Canadian investment advisors over the summer, the funds had total assets of $37.6 million as of August 31.