Geopolitical tensions are producing a split response among fund managers, new research shows: a renewed appetite for hedging on one hand, and a broader hesitancy to invest on the other.
FX automation provider MillTech reports a marked increase in the will to hedge, with 97% of North American fund managers suffering losses from unhedged FX exposure amid geopolitical uncertainty in Q1 2026 — averaging around $731,000 per fund. Among those that don’t currently hedge, 69% say they are now considering doing so. The shift has pushed hedging participation to 94%, the highest level MillTech has recorded since it began tracking in 2023.
Beyond hedging, the picture is less decisive. Almost all respondents (98%) said US policy uncertainty had delayed their investment decisions, with over a third (35%) reporting significant delays. And among the minority who still don’t hedge, the barriers are largely structural rather than strategic: burdensome hedging infrastructure was cited most often (56%), followed by a preference to deploy capital elsewhere (38%) and cost (31%).
Operational friction is shaping strategy elsewhere too. Getting comparative quotes (24%), forecasting existing currency risk (23%) and fragmented service provision (22%) top the list of challenges — a signal that managers want clearer pricing and better-connected FX workflows as much as they want more hedging.
