Shy away from USD ETFs because the dollar is currently so high?
Posted: November 24th, 2022, 5:40 pm
Think I can reason the answer to this but would appreciate confirmation:
If I want to invest in some Emerging Markets ETF that's only available in USD (such as EXMC "Lyxor MSCI Emerging Markets Ex China UCITS ETF - Acc") then, ignoring the currency conversion cost imposed by my SIPP platform (Interactive Investor), does it matter that this isn't traded in my home currency (GBP)? I'm thinking the answer is no, because once I've exchanged my currently cheap pounds for expensive dollars, those dollars will buy the same amount of EM equity (that the ETF is composed of) as could have been purchased with the original GBP sum. And the same will apply when it comes time to sell (however the two currencies have moved in the meantime). Have I got this right?
I'd prefer to stick to ETFs traded in GBP but there seems to be a much wider choice in USD.
If I want to invest in some Emerging Markets ETF that's only available in USD (such as EXMC "Lyxor MSCI Emerging Markets Ex China UCITS ETF - Acc") then, ignoring the currency conversion cost imposed by my SIPP platform (Interactive Investor), does it matter that this isn't traded in my home currency (GBP)? I'm thinking the answer is no, because once I've exchanged my currently cheap pounds for expensive dollars, those dollars will buy the same amount of EM equity (that the ETF is composed of) as could have been purchased with the original GBP sum. And the same will apply when it comes time to sell (however the two currencies have moved in the meantime). Have I got this right?
I'd prefer to stick to ETFs traded in GBP but there seems to be a much wider choice in USD.