Elroy Dimson

I think back to the time when I was more heavily involved with the Norwegian sovereign funds.

I chaired the strategy council for Norway for about a decade.

And early on when I was working with the Norwegians,

they had a strong Nordic tilt because they were buying and selling goods and services in Scandinavia and nearby.

And then over time, they came to appreciate that if they bought something which came out of Scandinavia, came out of an Ikea store, they weren't really too exposed to the Swedish currency because some of that would be made in China.

And if you look through that,

China was quite heavily linked to the US dollar.

There was a gradual realization that a strong geographic tilt is not in the interests of the Norwegian people compared to being well diversified globally.

I would be saying the same thing in Canada.

But there are these geopolitical issues which are being wrestled with now.

How much do you want to be self-reliant within a particular country?

The world is so complex now.

You can probably run another session like this focusing on geopolitical risk.

You'll get a lot of listeners.

Early in my career, when hedging currency was in its infancy, we used to focus on back-to-back loans.

In other words, a business, rather than taking exposure through setting up a subsidiary in another country, would borrow in that country and then invest the money.

And it was for exactly those sorts of reasons that you could end up with expropriation of assets you thought you had.

My wife's family come from Germany.

They were refugees at the outbreak of the Second World War.

My late mother-in-law remembered that the first bit of savings that they had took to Switzerland, they put a small amount in a bank.