[On :Freetrade:] GSPX - iShares core S&P500 UCITS ETF GBP Hedged

GSPX - iShares core S&P500 UCITS ETF GBP Hedged

One of the largest GBP hedged ETF tracking the S&P 500.
Dividends are distributed quarterly

Assuming the pound will appreciate against the dollar once brexit is resolved it would be good to invest in the US market without the currency risk :+1:

I do not see why this was not top priority for Freetrade!

Hedging is pointless makes no sense. I have hedged before. Over a 10 year period, which is what a lot will hopefully be investing for, it makes not sense to do it. It can actually work against you.

How does it make no sense?

Over the life of an investment you might find that any fluctuations in exchange rates balance out. But investing is about risk and to reduce your risk from currency fluctuations hedging is wise. You never know when you need to close a trade.

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It is short term. It is just another form of gambling as no one knows, even bank of England doesn’t know what will happen to the currency. Half of s&p earnings comes from abroad and something similar for the ftse so currency will always affect them.

Hedging is not gambling. It means that your investment matches the actual returns of the index (obviously minus the minimal cost of hedging) rather than potentially diverging massively.

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Looks like a lot of trading activity on this one. So no “liquidity” problems for FT.

Yet it looks like it’s barely covered by the “cheaper” brokers…


…does that suggest it’s unpopular??? I dunno. I just bring you data!

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If it’s “gambling” then maintaining the foreign currency exposure of an investment is also gambling. Unless your decision-making has fully factored in the currency exposures (implicit and explicit). The Bank of England sets the interest rate so it does have a strong influence over the short-term exchange rate, possible longer. Central banks’ moves have directional intent. But a focus on central banks is taking away from the topic. Back to currency hedging.

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If it is working for you, then continue. There is no one way of investing. Over short term it has its benefits, for me over long term, there are no benefits. You should be diversified anyway. I know lots of investors, some friends with over a million in investment and for the last 25 years, they have done really well without any hedging. There is also find managers that also don’t hedge.

There are some benefits long term. It all depends on the general movement in the currency pairs. Currencies do not fluctuate around a band over time but move directionally and can undermine your investment returns.

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