Portfolio percentage

Another one.

I don’t understand the profit percentage in the porfolio view.

I bough in few occasions this ETC “WisdomTree WTI Oil”… I guess 2.144… is the average price I got overall.

It says I have made 9.29%… shouldn’t that be higher ? (2.380-2.144)/2.144*100) =~ 11% ?

Currency exchange rate? :thinking:

Further questions/notes… please help, I’m getting there… @David

  • On the ISA trading instruments page there’s another crude oil ETC… “US74347W2474” I guess that is just something that has been removed a while ago ? I don’t seem to be able to purchase that.

  • This is the fact sheet of the WisdomTree crude oil ETC.

The same product is under different ISINs and trading currencies. The one listed here is DE000A0KRJX4 with Trade currency EUR.

  • Is the base currency still USD for this ETC, but the price is displayed in EUR ?

  • Does this mean when I purchase it, I effectively “hold” USD ? and the exchange rate I need to look out for is USD-GBP and not EUR-GBP ?

  • Does the above apply to ETFs as well ? Say VUSA, IE00B3XXRP09. The trading currency is GBP but the base currency is USD. So I need to look out for currency swings between GBP and USD ?

  • What about EUNL vs SWDA ? Trading price is in EUR and GBX, base currency for both in USD. If I purchase these, I hold USD in both right ? Would I be looking at the GBP USD exchange rate for both ? Or if I sell EUNL, my USD gets converted to EUR and then to GBP ?

Finally, is the portfolio percentage showing me the P/L% between amount of GBP spent and amount of GBP I would make if I sell at the moment (market price depending of course) ?

@Richard.W hope you are well. As you initially helped me with ETF and different currencies…could you review the above when you can. I almost got it I think.


The important thing is value of companies comprising the ETF. VUSA contains Apple, Coca Cola and Microsoft which are companies earning revenue in numerous currencies. So it is not a simple matter of one exchange rate, say USD/GBP rate. The key thing, as I see it, is that you will make the same return in GBP no matter if you initially buy 100 shares of VUSA or VUSD.

Personally, as a long term investor, I do not worry too much about exchange rates. Over time I will probably benefit as oft as I lose. I diversify across markets, industries and buy at many times in the year. The GBP was weak last week. But I still bought Amazon. This week GBP is even weaker and Amazon has gone up, so I have doubly benefited. But I was equally expecting GBP might strengthen.

Terry Smith has been asked if he considers exchange rates when purchasing for Fundsmith. He says not at all, and replies that CEOs seek to grow successful businesses from things like new customers, better supply chains and innovation, not from possible variations in exchange rates.

Yes. Why not try an experiment? In the practice account buy 100 shares of VUSA and also at the same time buy 100 shares of VUSD. Watch how the profit or loss of each looks over time. They should show nearly identical % changes and GBP profit/loss.

So I’ve run a few tests with Google Sheets against IE00B5BMR087 iShares Core S&P 500 UCITS ETF USD (Acc) which is available in USD, GBX, and EUR. (all accumulating and with base currency USD)

Tickers in Sheets are:

Result: exchange rate counts, nothing new here.

Mezzanine currency doesn’t basically count. (say you buy SXR8(so GBP->EUR->USD… you’ll see a very minor change in the P/L over few weeks, but over months it won’t change much against CSP1)

So you are right holding VUSA or VUSD should show the same P/L in portfolio…buying an ETF in EUR, USD, GBP might have minor differences short term but long terms it’s the same.

I thought I could “hedge” myself the ETFs by buying in different currencies but if you start from GBP and go back to GBP it doesn’t really make a big difference…until we have multi-currency account :slight_smile:

You can see in the red box. From top to bottom:

  • GBP to USD via EUR using P/L% of USD ETF(CSPX)
  • GBP to USD using P/L% oF USD ETF(CSPX)
  • GBP using P/L from GBP ETF(CSP1)
  • GBP using P/L from EUR ETF(SXR8)

so can’t diversify currency risk by buying USD, EUR or GBP fund. I’d always have to go back to GBP… which will return a similar value over time for all three. Short term you could see some bigger differences but not long term.

Also just re-run this… hedged ETFs are the only way to protect you from this as expected.

Looking back in time, they have been holding you back as USD has gained in value but if I pick points in time where the rate USD/GBP went down I can see the benefits of hedging… overall always best to buy directly the GBP priced ETF… I think you get a slightly better exchange rate… at least by calculating with a Google Sheet.

In the blue box I’ve added GSPX which is the GBP hedged S&P tracker… so if you think the exchange rate is going against you then best to purchase that(once available). Otherwise stick to GBP ETF non hedged.

Thanks for sharing your research. I agree thaf unhedged is generally the way to go. I would expect hedged to reduce volatility at the cost of reduced return. Perhaps some prefer that trade off.

If you really believe you can guess which way the exchange rate will go you could bet on that directly using fx CFDs.

Yes but I got puzzled… as looking here hedging doesn’t really protect you much… just harms returns… but I guess we’re looking at just one section in time. Look here:

GBP hedged(IGUS), EUR hedged(IUSE) and S&P ETF(CSP1) all accumulating.