About this calculator
This calculator is for education only and does not constitute investment advice. You invest $500 every month into an asset priced in a foreign currency. Each month your dollars buy a different amount of foreign currency — because the exchange rate moved — and that foreign currency buys a different number of units — because the asset price moved. At the end, the home-currency result blends both movements, and this page pulls them apart.
The split is exact, not approximate: (1 + asset return) × (1 + FX return) − 1 equals the total home-currency return, because both averages are amount-weighted over your actual installments. All rates and prices are entered by you — no live rate is fetched, and nothing here is a forecast. Past returns do not guarantee future results, and a currency tailwind in the past can become a headwind without warning.
How to use it
- Enter the fixed home-currency amount invested each month and how many monthly installments to simulate.
- Enter the starting exchange rate (USD per 1 unit of foreign currency) and its monthly change: positive means the foreign currency strengthens against the dollar.
- Enter the starting asset price in foreign currency and its monthly change.
- Read the final home-currency value, then the split: the asset return is what the asset did abroad, the FX contribution is what the currency did to it on the way home.
The formula
The exchange rate in month t is the starting rate compounded by the monthly change, and the asset price likewise — a simple, transparent path you control, not a market forecast. Average purchase rate is total invested divided by total foreign currency bought, and average purchase price is total foreign currency spent divided by total units; because both averages are weighted by the amounts actually spent, the identity (1 + asset return) × (1 + FX return) − 1 = total return holds exactly. Fees, bid-ask spreads, taxes, withholding and dividends are excluded; a real brokerage statement would show all of them.
Worked example
$500 a month for 12 months, starting rate 1.08 USD per euro rising 0.5% a month, asset starting at 100.00 foreign currency rising 0.3% a month: $6,000 invested buys 5,406.03 foreign currency in total and 53.1893 units, at an average purchase rate of 1.1099 and an average purchase price of 101.64. The final month's rate is 1.1409 and price 103.35, so the position is worth 5,497.11 foreign currency, or $6,271.69 — a total return of 4.53%, split into a 1.68% asset return and a 2.80% currency contribution (1.0168 × 1.0280 − 1 = 4.53%). The currency did more work than the asset. Contrast a falling currency: $1,000 a month for 6 months at 1.27 falling 1% a month with the asset rising 1% a month gives a 2.50% asset return fully cancelled by a −2.47% FX contribution, for a total return of −0.02% — the asset gained abroad and the investor still ended flat at home.
Sources: Amount-weighted average purchase rate and price; return identity (1 + asset return) × (1 + FX return) − 1 = total return. No live rates are fetched; fees, taxes, spreads and dividends are excluded. Last updated: October 2026.
Frequently asked questions
Why can the total return be near zero while the asset gained?
Because the home-currency result multiplies the asset return by the currency return. In the second example the asset rose 2.50% in its own currency while that currency fell 2.47% against the dollar, and 1.0250 × 0.9753 − 1 = −0.02%. An overseas gain is only a home-currency gain once converted.
Is the monthly-change path a forecast?
No. It is a scenario you type in to see the mechanics — a steady drift is the simplest path that still shows installments buying different amounts each month. Real exchange rates jump, reverse and gap; a smooth path understates that volatility. Try a negative monthly change to see the headwind case, and remember past returns do not guarantee future results.
Does dollar-cost averaging remove currency risk?
No — it spreads entry points, which softens the average purchase rate, but it does not hedge anything. If the foreign currency trends down for the whole plan, every installment converts at a worse rate than the last, and the FX contribution stays negative. Averaging changes the average; only a hedge changes the exposure.
What is missing from this model?
Brokerage and conversion fees and spreads, taxes and withholding on dividends or gains, any dividends the asset pays, and corporate actions. It also values the position at the final month's rate and price with no exit costs. Treat the result as a teaching model for the return split, not a portfolio statement.
What formula does this foreign currency dca calculator use?
Foreign bought each month = monthly investment / exchange rate; units = foreign bought / asset price; total return = (final units × final price × final rate) / total invested − 1; asset return = final price / average purchase price − 1; FX return = final rate / average purchase rate − 1 The exchange rate in month t is the starting rate compounded by the monthly change, and the asset price likewise — a simple, transparent path you control, not a market forecast. Average purchase rate is total invested divided by total foreign currency bought, and average purchase price is total foreign currency spent divided by total units; because both averages are weighted by the amounts actually spent, the identity (1 + asset return) × (1 + FX return) − 1 = total return holds exactly. Fees, bid-ask spreads, taxes, withholding and dividends are excluded; a real brokerage statement would show all of them. The worked example on this page applies the formula step by step with real numbers, so you can verify the result by hand.