Hi Everyone. If this has been discussed before please let me know or point me in the right direction.
In simple terms can one explain the pros and cons of owning US Stocks in an ISA in respect to the GBPUSD currency. I have been trying to read about hedging and I’m just trying to understand the risk from a currency aspect of owning us stocks.
As an ISA everything in the ISA has to be in sterling. So how does the affect my US stocks?
for example, is I buy Apple (or any US stock) traded in $ when the pound is weak. That stock rises or falls in the future, but so can the sterling, it can fall or rise. So owning US stocks, in my ISA. will I want the pound to keep falling or for it to rise. When I go to sell it will have to convert it back to dollars and then back into sterling to withdraw?
at the moment I only own gold and SP500 ETF which I bought already in sterling. Is this better or should I hold SP500 and Gold in $ within my ISA. Does all of this matter long term?
Anything to help me understand this idea especially from the point of view of holding it in my ISA in sterling but the holdings being denominated in $ and what would happen in the next 10 years if the sterling returns to strength or continues to fall?