If it is hedged, you get the return of the index. If it is unhedged, you get the combined return of the index and the foreign exchange movement.
So if the US index goes up 10%, but the NZD increases in value against the USD by 10%, your return is 10 for a hedged, but 0% for an unhedged.*
* I think I got that right and obviously there is a cost to an index fund and to a hedging policy so the returns aren't exact.
Ah OK. So hedged would definitely be an advantage in that case. I can't seem to find any info re that around the Smartshares funds. Might have to dig a bit deeper.
It is a moo point (see video) whether currency hedging is of any benefit in long term regular investing as the gains and losses tend to even out over time and you are left with an extra expense diminishing overall returns.
It is a moo point (see video) whether currency hedging is of any benefit in long term regular investing as the gains and losses tend to even out over time and you are left with an extra expense diminishing overall returns.
Ah OK. So hedged would definitely be an advantage in that case. I can't seem to find any info re that around the Smartshares funds. Might have to dig a bit deeper.
I don't think any of the smartshares have any currency hedging options
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