Currency hedge
Posted: September 29th, 2019, 2:36 pm
I live in Italy but my investments are still in the UK, mostly in an investment trust. When we moved, one job I meant to do was to look at transferring my investments into euro-denominated unit trusts or similar. A theoretical rational investor prefers to have his assets in the same currency as his expected liabilities, because otherwise he runs an extra risk, that the FX rate moves against him.
But it was September 2008, and the global financial crisis was not the right time to make big changes, so the task got postponed and I never got round to it. I am not too bothered, although GBP has gone down relative to EUR, because my investments were sound and have done well, and the FX hit averaged over 11 years is not a big deal. But at the back of my mind I think that I should really try to find a way of investing here that does what I want, a unit trust investing in global equities as well as other asset classes, denominated in EUR. The matter has become a little more urgent because this year I have inherited some more GBP. I have started to ask around, but I haven’t found anything that resembles the UK trust I like, Personal Assets Trust.
In theory I should be able to hedge the currency risk, but as far as I know this only becomes practical with much larger portfolios, say 10m GBP and up. I am talking about less than 1m.
So I have two questions. First, is there an affordable way to hedge? Second, does anyone know of a EUR trust that is at all similar to PAT?
But it was September 2008, and the global financial crisis was not the right time to make big changes, so the task got postponed and I never got round to it. I am not too bothered, although GBP has gone down relative to EUR, because my investments were sound and have done well, and the FX hit averaged over 11 years is not a big deal. But at the back of my mind I think that I should really try to find a way of investing here that does what I want, a unit trust investing in global equities as well as other asset classes, denominated in EUR. The matter has become a little more urgent because this year I have inherited some more GBP. I have started to ask around, but I haven’t found anything that resembles the UK trust I like, Personal Assets Trust.
In theory I should be able to hedge the currency risk, but as far as I know this only becomes practical with much larger portfolios, say 10m GBP and up. I am talking about less than 1m.
So I have two questions. First, is there an affordable way to hedge? Second, does anyone know of a EUR trust that is at all similar to PAT?