Unhedged ETF's in USD

General
1

Are they a huge gamble?

USD is up around 20% against GBP in just a year.

That’s a huge percentage amount. What if GBP bounces back over the next year or so?

I’ve drip feeded in to Vanguard s+p 500 (vuag) over the past half year and it feels like it’s more important what the currencies do rather than what the stock index does.

I don’t want to gamble on currency fluctuations so should I sell and buy hedged or is the long term trend of USD rising against GBP likely to continue? (I have no idea).

Thanks for any help.

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2

Well nobody has a crystal ball. :slightly_smiling_face:
The currency exchange is correct for this exact moment in time in history.
In my opinion, there is an equal chance of keep going up or down due to million variables at play.

If you feel uneasy in “risking” it all in one curreny, you can spread you investment and risk across multiple currencies for the same index to make it less volatile.

i.e. 50% USD (VUAG), 25% GBP Hedged (IGUS) and 25% EUR Hedged (IUSE) of your drip feeding.

I’m considering doing something similar myself.

Best of luck

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3

Thanks for reply.

Yes I was thinking along those lines aswell. Going to start buying GBP Hedged to add to the USD.

Amazing divergence today (and most the year) s&p 500 index down over 2.00% so far today. vuag finishes up 1.23% today.

4

Seems the Govt has rocked up to the roulette table and gone all in on Red. If you know where that wheel is gonna stop - then that it what you do. If you don’t then as others have suggested maybe spread the risk a little.

If you switched to hedged version now, you could think of that as locking in the currency gains made to date

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5

Would it be better to go with
Invesco S&P 500 G500 0.05% or Xtrackers S&P 500 XDPG 0.09%, instead of IGUS 0.2%?

All 3 say hedged. Best to buy the cheapest one at 0.05%?

I’m thinking of buying some Google shares. Does anyone know is you can you buy individual stocks GBP hedged on other platforms please?

6

@AS111 S500 looks cheap indeed.

Just take into account that S500 is a derivatives investment. They don’t actually physically own the underlying stocks.

On paper they should be equally safe, but when I hear derivatives, synthetic and swap I have the creeps. :sweat_smile:

Btw At the end I have opted for GSPX (0.1% TER), i didn’t even look what was available when I wrote the example. Indeed IUSE is not even available. Can’t find any EURO hedged ETF in InvestEngine.