POLARIS KOREA

LESSON 04 · 7 min

FX risk and the won

Understand when KRW helps or hurts your dollar-denominated return.

Your return has two moving parts

A U.S. investor's result combines the stock return in won and the change in KRW against the dollar. A rising stock can still produce a weaker dollar return if the won depreciates enough.

Use the same time window

Compare the equity purchase and sale with USD/KRW over identical dates.

  • A higher USD/KRW rate means one dollar buys more won—usually a weaker won.
  • Dividends are also converted back into dollars.
  • Hedging changes cost and risk; it does not eliminate every basis difference.