Time to ride the GBP strength?

[grimer]

It is time to start rotating money out of Dollar-denominated trackers, etc, and into GBP?

If so, how would you achieve this within a self-selecting pension fund?

[Alaric]

It is time to start rotating money out of Dollar-denominated trackers, etc, and into GBP?

I doubt the denomination of a fund makes a difference to its performance in sterling terms. You would have to shift geographic focus to make a real difference. So you would sell your dollar denominated tracker of US stocks and buy a sterling denominated tracker of UK stocks. That changes your economic exposure as well as your currency exposure. If you just buy a sterling dominated tracker of US stocks, you aren't changing anything once you express all your returns in sterling.

[grimer]

The added problem would be a FTSE 100 tracker declaring foreign earnings, so that might devalue as the GBP strengthens.

Any ideas on a play that would bake in last year's currency gains?

[moorfield]

It is time to start rotating money out of Dollar-denominated trackers, etc, and into GBP?

If so, how would you achieve this within a self-selecting pension fund?

I'm not sure rotating between pension funds will get you as far as you might be hoping, once you''ve factored transaction costs etc.

If you have a strong short/medium view on where GBP/USD is going, or definitely not going, use a spread betting account!

[DiamondEcho]

I was going to start a topic on Sterling and the future likely impact on London stocks with material exposure to profit derived in foreign currencies, but I'll park my thoughts here for now.
In companies with majority foreign earnings in foreign-currency to Sterling converted terms we've arguably had something of a banner-year post-BREXIT. As Sterling has wilted so converted divs has risen. This is something a simple sift of company performance could miss.
I'm looking at positions I have where the profits have benefited in this way, as with the BoE rattling the rate-rise cage, Sterling now strengthening might be expected to reduce the value of converted dividends in future.
Usually I wouldn't consider the currency impact on converted divs and just take the income for what it is as it comes in, but this year has been so unusual I feel it does merit some attention. I don't think I'll make a wholesale switch into shares with solely Sterling derived profit, but right now I feel unlikely to invest in anything new with highly significant foreign currency profit, that would add an element of instant currency headwind from here forwards.