Would you invest in currency hedged or unhedged ETFs?
Hi James. With the aussie dollar at about 66 US cents, do you have a view on buying unhedged ETFs or the currency hedged version at the moment? eg. IVV v IHVV and QUAL v QHAL?
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Answer
Hi Scott,
Our opinion on whether to use hedged or unhedged ETF’s comes down to how we see the $US across the timeframe being considered by the investor at the time, with respect to today:
- Short term we are bullish the $US hence if the position was more “trade like in nature”, or short term, we would leave the position unhedged assuming its $US denominated as it benefits from a rising Greenback.
- Medium/longer term we are bearish toward the $US hence we would want the position to be hedged against weakness in the Greenback.
