Overseas ETF’s
Dear James, We wish to buy some ETFs including the S&P 500 or the NASDAQ is it best to purchase an overseas managed fund or an Australian managed fund? Do you have any other suggestions?” - Thank you, Kind Regards Malcolm H.
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Answer
Hi Malcom,
The difference is all about cost, currency hedging and ease of purchase – the underlying exposures are the same. Hence if you buy an Australian based ETF the ease of purchase is high but there may be currency risk alternatively if an Australian investor buys say the American traded QQQ (US) NASDAQ ETF they would benefit if the $US were to rally and vice versa.
As a guide if you are bullish the $A its usually best to purchase a locally traded ETF or one that is hedged for FX obviously its always beneficial to buy ETF’s that are easy to access and cheap to both transact and hold i.e. watch for issuer costs of holding the respective ETF’s.
Here’s a good guide from the guys at ETF Securities which covers all ETFs listed in Australia at the time of publication: 2020Landscape
