Really great post @RealMichaelScott!! What do you think about ETF currency risk for EUR countries ? I've check the ETFs on your post and they seem to be all USD. You can check this topic on my post also here https://getqu.in/z99qAI/
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@income_magician_1133 I wouldn‘t hedge the risks of currency. Because the risk on the downside is also a chance on the upside.
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@RealMichaelScott I understand, but currently EUR is almost in pairity with USD (1 EUR = 1.03 USD). Historically EUR is like 1.2 USD. if someone invests in an USD currency ETF today, won't that represent a loss (20%) if EUR gets stronger again (1 EUR = 1.2 USD again ) ? I'm thinking on investing in an world ETF right now and this bugs me ...
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@income_magician_1133 your thought is right if we ever see a 1.2 USD change rate again. Euro will be get weaker, at least in my opinion. On the other hand there are not only USD and EUR in a World ETF, so you get a whole bucket of currencies.
And don‘t forget: hedging against currency losses also produces hedging costs in the range of the intereset difference, i.e. ~2% p.a. for USD/EUR.
And don‘t forget: hedging against currency losses also produces hedging costs in the range of the intereset difference, i.e. ~2% p.a. for USD/EUR.
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@RealMichaelScott Thanks again for your enlightening! That may be why there are so few Eur hedged World ETFs...
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