Hedge
Hedged VS Unhedged ETFs
Say you buy some Apple stock. This gives you shares that are traded in New York in USD. If Apple gains 10%, but the USD loses 10%, you net a 0% gain, despite the underlying stock doing pretty well. So to counteract this risk("hedge it", in finance-speak), you buy a contract that guarantees your CAD/USD exchange rate. This means that you don't care what the exchange rate does, you just care about the USD-denominated performance of your US stocks, the EUR-denominated performance of your EU stocks, and so on.
Generally, you want to keep your currency exposure to roughly the same as your currency expenditure, so if you vacation in the US a lot, having USD exposure is good. If you never go near the place, hedging might make sense. It does cost you money on the MER, though, and it means you're giving up all potential gains from the USD going up(which have been substantial in the last few years).
The choice between hedged and unhedged ETFs, particularly in the context of currency exposure. Hedging eliminates currency risk but may limit diversification, whereas unhedged ETFs offer diversification but expose investors to currency fluctuations.
In the video, Chris suggests that unhedged ETFs can be favorable for global shares and gold investments, offering diversification, while recommending hedged ETFs for fixed income investments to minimize currency risk. The choice between hedged and unhedged ETFs depends on the specific investment goals and risk tolerance of the investor.
Further reading: Should I Buy Hedged or Unhedged ETFs?