USD affect of local etfs?
How will a decline in DXY and/or weakening USD affect local etfs such as FANG and NDQ? Rgds, JanP
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Answer
Hi Jan,
There is arguably two parts to this question, and we have answered accordingly:
- Firstly, the $US is likely to fall if US bond yields continue their recent decline, this should theoretically add a bullish tailwind to the NDQ and FANG ETFs.
- Secondly, if you are holding these two ETF’s they are $US denominated assets hence if the $A rallies say 5% to around 70c all else being equal your position will have fallen by 5% in value in local currency terms. The NDQ does have a hedged version, which trades under the code HNDQ.
