Well I personally stick with SPDR MSCI World and Invesco S&P500(In lack of Invesco MSCI USA).
Due to my country tax regime, I stick to accumulating, no dividend tax payments.
Honestly as long as you stick to saving/investing plan, you will win on the end.
In my opinion yes, but I havenât seen the weightings of each of them.
I am working on the weight. But I am lost
Yeah man, thanks for the help. I am going to try to get rid of some of my stocks and start from scratch bit I want to have a strong base of ETFs and then play around with some stocks individually
There are different currency risk exposures with Stocks (or other asset classes) and ETFs.
Stocks/Bonds/Gold/other asset classes
Example:
US Stock = USD currency risk: USD -> GBP or EUR or other currency
ETF/IT/REIT
Example:
ETF US Stocks in GBP bought with EUR
USD Stocks = USD currency risk: USD -> GBP
ETF GBP = GBP currency risk: GBP -> EUR
In the end: USD -> GBP -> EUR
In a Global ETF, there are multi currency exposure inside itâs portfolio, that must be convert to the ETF currency, and if you bought the ETF with a different currency, it adds another level of currency conversion/risk.
The only way to protect from the currency risk is to invest in a fund/trust with a currency hedge to our national currency, but this currency hedge isnât 100% proof, there always be a residual part of the portfolio that is unhedged (the portfolio managers donât buy real-time currency derivatives to protect the portfolio, for several reasons, the most obvious is that there are market fluctuations in the market values of the assets).
Studies and financial experience states that currency hedges are only good for the short-term, to protect against the currency volatility, when speaking about the major currencies, for example, USD or EUR. For more âexoticâ currencies, such as developing countries, a currency hedge could be wise to use (but also more expensive). Any currency hedge (or other type of hedge) costs money, and itâs more expensive in high volatility periods and depends of the underlying asset.
Iâm not talking about currency exchange fees. But about the value of the currencies.
So I was right. There is that risk of buying my ETFs in my local currency. Is there a similar ETFs from the list above in Euro?
You have to search in T212 offer. There are some EUR ETF, some EUR Hedged.
Peharps T212 could add a currency filter also with the Hedge option to the search panel (and also about distribution policy, Acc. or Dist.).
For example, I bought a ETF MSCI World EUR Hedged because of the actual weakness of USD against the EUR, as I was investing only for some weeks and donât want to have bad surprises.
The USD have lost quit a lot this year vs. EUR. But for the long-term, EUR/USD will return to ânormalâ equilibrium (some years wins the EUR, others the USD, it also depends of run to safety in stress periods).
Traditional safe-heaven assets are denominated in JPY or CHF. German Bunds and US Treasuries are also used in that manner.
I understand you concern, it seems that there is more USD and GBP offer than in other currencies. 
Buying now companies based in US is a win win. Never USD was so low. So from now on (long term) it is going up so it will affect positively in our currency exchange return
@Trader121, you could use the Morningstar site from any EUR country (there are several national versions), Morningstar automatically converts the ETF/IF/IT/REIT performance to EUR. Itâs the ideal for ETFs or other type of funds denominated in EUR.
If you use the Morningstar UK, Morningstar will convert the performance to GBP, if you compare the same ETF traded in the same stock exchange in Morningstar UK and Morningstar in a EUR country, you will notice the differences caused by the currency. Morningstar UK is ideal for GBP funds.
A dedicated European ETF site is
https://www.justetf.com
If ETF is denominated in USD and you purchase EUR/GBP/USD variant , the outcome is same.
Yes the risk is in USD, but idea is there is no difference in return EUR vs GBP vs USD as etf is in USD.
Thus the hedged version is where fund currency is GBP or EU, again you can have multiple versions, result same. So only currency risk is underlying fund currency.
All this was clarified earlierâŚ
Yes, itâs true. If you are for the long run and doing cost averaging, the currency prices will have less impact with the years passing by, like the asset prices.
We donât know if on the next months, USD could fall more against the EUR. EUR is overvalued (against several currencies) and USD is undervalued (against several currencies).
Now with the 2nd US bazuka talks, it is pressing more the USD. US Public Debt is sky-rocketing, that is one reason to this year overvaluation of the BTC. The price of BTC is made by the pair BTC/USD.
Do you guys have ETFs in your portfolio? I believe if your are based in the UK you are lucky. The most of them use GBP. But I couldnât find that many with EUR currency
I think you got confused by all this wall of text from @RLX .
ETFs are displayed in GBP/EUR/USD, but they are infact based in USD. Only Hedged versions are based on different currency.
In the past, I have done fund selection, and comparing the same Investment Fund (IF) but in different currencies, there was always differences, in the returns, standard deviations, alphas, betas and other ratios.
I even bought US Stocks IF in GBP with EUR, because the GBP IF was better at moment than the EUR version (pre-Brexit referendum).
In the same IF but hedged to different currencies, there are almost identical performances, the differences are explained by the residual unhedged positions.
When there is 3 currencies (or more), someone can have an arbitrage opportunity. (Currency exchange fees and fast tech eliminate the retail investors for doing this.)
I donât think this is really helping original question. If you want to keep confusing @Trader121, that is your call.
Bottom line is ETF is exposed to USD weather you buy in EUR or GBP⌠that was the original question.
There is a topic here:
For this debate⌠OP is asking basic questions, donât think it is useful dropping wall of text to confuse further.
If you have EUR and buy an ETF denominated in GBP, you have a currency exposure to GBP. -> 1st currency risk (GBP/EUR)
And if the ETF portfolio have a third currency (USD), you have another currency exposure. -> 2nd currency risk (USD/GBP)
The Hedged versions mean, that you are protected against the portfolio currency.
But if have EUR and buy a GBP denominated ETF, it will have a currency hedge against assets currency (USD). You eliminated the USD currency risk, but because you bought a GBP ETF with EUR, you still have a currency exposure GBP vs. EUR. -> Only 1 currency risk (if we donât account for imperfect currency hedge) (GBP/EUR).
Itâs always true, when an ETF is currency unhedged. I always said that. I added that there is a 2nd layer of currency risk when you buy an ETF with a third currency. In the original post, itâs mentioned EUR, GBP and the ETFs have different currencies and are currency unhedged.
@Vedran, our colleague (@Trader121) mentioned that he use EUR (1st currency) and have a list of ETFs in GBP (2nd currency) that are currency unhedged (several currencies, e.g. JPY, EM, Global).
Isnât that correct @Trader121?
I am a bit confused. So at the end should I worry about currency? Or is it ok to buy my ETFs list? Lol
if you find ETFs that are listed in Euro it makes perfect sense to invest using those if it helps keep things simple and straightforward for yourself. most of the ETFs we have in GBP are also available in EUR I believe, if they arenât added yet then its just a matter of requesting them.
if you believe in your list, just buy them. the US is very lucrative and currency fluctuation goes both ways and is inevitable. chances are things even out to a sort of balance as you grow the positions over time.