The traditional approach to measuring the performance of international portfolios focuses on the value added by management (relative to a given benchmark). This value added is attributed to management's country allocation and security selection decisions. But two other components can also affect value added--(1) the forward currency effect, which accounts for the forward premium and benchmark weights, and (2) the currency management effect, which accounts for currency surprise and any portfolio deviations from the benchmark's currency exposure. The return attributable to the forward premium is known at the outset and therefore should not be attributed to active management. Separating the effect of the forward premium from the effect of currency management should allow more accurate determination of the value added by the manager's currency management decisions.