GBP Hedged Equity ETFs

Hello,

We currently do not seem to have any GBP Hedged Equity ETFs available on the T212 ISA.
It would be useful to have some to reduce currency exposure/risk, particularly now that the GBP is around a potential low point against the Dollar and Euro.

I believe the ones below could be quite interesting.
Could you please include them on the T212 platform?

  • Invesco EQQQ NASDAQ-100 UCITS ETF GBP Hdg Acc, ISIN: IE00BYVTMW98, Bloomberg Ticker: EQGB:LN, OCF(%): 0.35

  • XTrackers S&P 500 UCITS ETF 2C GBP Hedged, ISIN: IE00BM67HX07, Bloomberg Ticker: XDPG:LN, OCF(%): 0.094

  • iShares Core MSCI EMU UCITS ETF (GBP Hedged), ISIN: IE00BG0J9Y53, Bloomberg Ticker: CEUG:LN, OCF (%): 0.12

  • Fidelity Global Quality Income UCITS ETF - GBP Hedged Acc, ISIN: IE00BYV1YF22, Bloomberg Ticker: FGQI:LN, OCF(%): 0.45

  • Fidelity Europe Quality Income UCITS ETF - GBP Hedged Acc, ISIN: IE00BYSX4408, Bloomberg Ticker: FEQP:LN, OCF(%): 0.35

  • UBS ETF (IE) Factor MSCI USA Prime Value UCITS ETF (hedged to GBP) A-dis, ISIN: IE00BXDZNH00, Bloomberg Ticker: UPVL:LN, OCF(%): 0.35

  • UBS ETF (IE) Factor MSCI USA Quality UCITS ETF (hedged to GBP) A-dis, ISIN: ISIN: IE00BXDZNK39, Ticker: The Ticker does not seem to match to an operating ETF on Bloomberg but the ETF is still available on the UBS website, OCF(%): 0.35

They all trade on the London Stock Exchange.

If these are not posible but others are please let me know. I made a list of the GBP Hedged ETFs available from which I shortlisted the above as I found them most interesting.

I would appreciate if you could reply once they are available or to confirm that it is not possible.

Thanks!

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I agree. We need to se more ETFs in sterling. It’s odd so many are missing at the moment.

On platforms with a 1% or 1.5% fee for currency conversion then a GBP denominated ETF is preferable for a UK investor. But since it costs very little to convert currency on T212 there is little reason, so far as investment return goes, to prefer a GBP denominated ETF like, say, VUSA to the USD equivalent, VUSD. Neither is currency hedged. Of course things are different if you want to hedge the GBP/USD rate.

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I’m a newbie when it comes to all this but from what I gather it’s always best to invest in your own currency as the original post suggests. I’m disappointed there aren’t more ETFs in pounds here say to even Freetrade, which is a much newer platform.

Why?

VUSD trades on the LSE and is exactly the same product as VUSA. It’s like saying that it is better to buy beer in pints rather than liters.

Not really, if the pound is weak against the dollar when you’re selling you’ll end up with less and also there is also potential tax implications depending what you are purchasing. If you’re trading with a stock/etf in pounds at least you know what you are getting when you sell.

@Step24 You are suffering from a common misconception. I promise you: the tax implications, profit, and all else will be identical no matter if you own 10 shares of VUSA or 10 shares of VUSD, despite the fact that they are denominated in GBP and USD respectively. Try an experiment: start a market order for 10 shares of VUSA and see how much it will cost in GBP. Then do the same for 10 shares of VUSD. At the moment both those purchases cost £429. If you were to hold them for a year and then sell, each would produce the same proceeds in GBP. Same profit, same tax implications.

Okay I’ll give it a try. I appreciate the feedback.

@Step24 @Richard.W
I believe that you may have misinterpreted my request.
The ETFs that I am requesting are GBP-Hedged, consequently they eliminate the risk due to currency variations (with respect to the GBP). This is not the same as just listing a stock or ETF in T212.

An example for an investment from the point of view of a UK investor:
If you buy a normal (unhedged) ETF for the S&P, whether it is listed in GBP on T212 or not, and say you invest 1000 pounds (GBP) if the S&P then rises by 30% but the GBP becomes stronger by 20% by the time that you decide to sell, then you only make 10% profit (30%-20%), whereas with a hedged ETF this does not happen, it removes the currency fluctuation aspect and you would still earn the full 30%.

Obviously it could go the other way eg. the GBP Becoming weaker by 20% and you “missing out” on that 20% extra, it simply reduces the risk associated with fluctuations in the exchange rate of a currency.

I personally think that currently for a UK (GBP) investor it is best to invest in both GBP Hedged ETFs and unhedged ETFs (currently considering 70% for the hedged and 30% for unhedged) as the GBP is quite low at the moment, compared to the USD and it may rise once the COVID-19 and Brexit uncertainty dissipates. Also, in my case I expect to have significant investments in individual stocks from the US/Eurozone which are unhedged, therefore increasing my exposure to currency fluctuations.

I think that having GBP Hedged ETFs could be of interest to many UK investors on T212.

This article explains it quite well:
Currency hedging explanation from justetf.com

To note that currency-hedged ETFs often have higher OCFs (annual fees) but based on my simple online research this is not always the case, some of the ones in my opening post have very low OCFs, around 0.1%.

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No, this is the point I was clumsily trying to make, I didn’t mean in sterling, I meant hedged. Although EQQQ definitely is on the platform.

Yup, we need these GBP hedged etf’s more than ever now as the dollar has lost a lot of value lately and eaten up gains when converted back to sterling.

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