I’m a little bit confused about ETF’s priced in USD and GBP. Surely it is more about saving on foreign exchange fees? Shouldn’t we be thinking more about the state of the actual currency and future capital flows? Because presumably if we buy an ETF priced in GBP and the assets are denominated in US dollars, and the US dollar rises during the holding period, then aren’t we losing out? Surely the GBP ETFs are hedged? So for example, if I believe the US dollar is going to rise against the British pound over the next three years, then should I not be buying the ETF priced in US dollars? Because not only will I benefit from any rise in the normal level of the instrument, but I will also profit from the rise in the US dollar over the British pound as well? Can someone please tell me if I’m going mad. It just seems clear to me but if I bought the S&P 500 index but with a GBP fund, and the British pound falls in relation to the US dollar in that time, then my returns are not going to be optimal in the slightest?
Read the fund’s Factsheet. For example, iShares Core S&P 500 UCITS ETF USD (Dist) has 2 tickers on the LSE: USD IDUS and GBP IUSA. These are the same fund (ISIN : IE0031442068) with the same performance. If trading on a GBP platform you save the platform’s currency exchange fees by choosing the GBP ticker. If a fund is hedged it will state hedged. Consider a hedged fund if you think the GBP will strengthen against the other currency, for example: IShares VII Plc Core S&P 500 UCITS ETF GBP Dis Hdg (GSPX).
You are correct in the effects you describe, but an ETF will not be currency hedged unless explicitly stated. It’s more common for bond ETFs so that the currency volatility doesn’t overwhelm the bond volatility. I like unhedged equity ETFs for the currency diversification benefit.
The China podcast had its interesting moments but I felt it was rather irritatingly anti-China biased. You managed to turn the fact that Chinese people have currently 21 TRILLION USD in savings as a negative (Americans have 900 billion). Just imagine the possibilities that gives to the economy, stock market valuations AND government debt (selling bonds). Also, MSCI China has actually increased a lot, despite current slump (well, less current now).... *IF* we don't include like 7 first years of the index. In fact MSCI China from 2003 lows was *WAY* outperforming SP500 up to Covid.. Anyway, you guys should allow comments under the YT podcast vid.
Thanks for the breakdown! I need some advice: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). How should I go about transferring them to Binance?
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Another great video, I really value and appreciate the advice and education ; thanks so much Ramin.
I'm highly inspired.
Please spill some sugar about the bi-weekly stuff you mentioned.
Ramin please tell me you didn’t hold KWEB for so long just to sell it before this boost?
If each MMF is buying the same thing... why are they all having slightly different returns?
I’m a little bit confused about ETF’s priced in USD and GBP. Surely it is more about saving on foreign exchange fees? Shouldn’t we be thinking more about the state of the actual currency and future capital flows? Because presumably if we buy an ETF priced in GBP and the assets are denominated in US dollars, and the US dollar rises during the holding period, then aren’t we losing out? Surely the GBP ETFs are hedged?
So for example, if I believe the US dollar is going to rise against the British pound over the next three years, then should I not be buying the ETF priced in US dollars? Because not only will I benefit from any rise in the normal level of the instrument, but I will also profit from the rise in the US dollar over the British pound as well?
Can someone please tell me if I’m going mad. It just seems clear to me but if I bought the S&P 500 index but with a GBP fund, and the British pound falls in relation to the US dollar in that time, then my returns are not going to be optimal in the slightest?
Read the fund’s Factsheet. For example, iShares Core S&P 500 UCITS ETF USD (Dist) has 2 tickers on the LSE: USD IDUS and GBP IUSA. These are the same fund (ISIN : IE0031442068) with the same performance. If trading on a GBP platform you save the platform’s currency exchange fees by choosing the GBP ticker. If a fund is hedged it will state hedged. Consider a hedged fund if you think the GBP will strengthen against the other currency, for example: IShares VII Plc Core S&P 500 UCITS ETF GBP Dis Hdg (GSPX).
You are correct in the effects you describe, but an ETF will not be currency hedged unless explicitly stated. It’s more common for bond ETFs so that the currency volatility doesn’t overwhelm the bond volatility. I like unhedged equity ETFs for the currency diversification benefit.
The China podcast had its interesting moments but I felt it was rather irritatingly anti-China biased.
You managed to turn the fact that Chinese people have currently 21 TRILLION USD in savings as a negative (Americans have 900 billion). Just imagine the possibilities that gives to the economy, stock market valuations AND government debt (selling bonds).
Also, MSCI China has actually increased a lot, despite current slump (well, less current now).... *IF* we don't include like 7 first years of the index. In fact MSCI China from 2003 lows was *WAY* outperforming SP500 up to Covid.. Anyway, you guys should allow comments under the YT podcast vid.
I asked the bank advisor about how to hold gilts ladder in an ISA and she was clueless.
Copper panned out 😂
Thanks for the breakdown! I need some advice: My OKX wallet holds some USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). How should I go about transferring them to Binance?
Beware the online financial advisor recommendations ;)
Beware also the advice of random social media users 😀
VMFXX currently paying 4.63%, duration prolly 1 day :)