Join our investing community

Investing in International Shares & Currency Play

Discussion in 'Shares' started by Shady, 30th Dec, 2009.

  1. Shady

    Shady Well-Known Member

    Joined:
    13th Feb, 2009
    Posts:
    52
    Location:
    Sydney NSW
    Hi,
    I'm considering investing directly in international shares and wanted to keep exchange rate movements 'in play'.
    I have read somewhere that I need to buy international shares with currency other than $AUD.
    Does it matter if I buy US shares with $AUD or $US?

    Do currency fluctuations impact on listed investments funds aimed at international shares/property? Are there hedged funds and unhedged funds?
    If currency fluctuations do affect LIC's is the effect immediate or is it delayed days/weeks/months.

    Cheers
     
    Last edited by a moderator: 30th Dec, 2009
  2. Tropo

    Tropo Well-Known Member

    Joined:
    17th Aug, 2005
    Posts:
    3,394
    Location:
    NSW
    Currency Fluctuation...http://www.invested.com.au/7/us-fund-distribution-1065/
     
  3. Shady

    Shady Well-Known Member

    Joined:
    13th Feb, 2009
    Posts:
    52
    Location:
    Sydney NSW
    Thnks for that Tropo, Very informative post.

    I understand the effects of currency movements but not sure how it affects individual trades.

    I've seen that with ETF like a 'global equities' or 'global property' fund it mentions whether its hedged and usually the amount of hedging (10%-50%, 100%) against currency fluctuations so thats easy to work out.
    With ETF that do not hedge i wonder if the fluctuations in exchange rates are reflected in the daily price of the fund or whether there is a lag of some sort.

    As I mentioned in my first post I read somewhere that it makes a difference how you purchase shares, either through a broker like Comsec with $AUD or depositing $US in a US trading account and using a US broker to trade.

    I had originall thought that it doent make a difference how you purchse international stocks, currency is always in play.
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

    Joined:
    9th Jun, 2005
    Posts:
    4,619
    Location:
    Sydney, Australia
    Read this document on the iShares website for information on how they deal with currencies: http://au.ishares.com/publish/content/documents/pdfs/currency.pdf

    I wrote about how currency movement is taken into account for the IEM emerging markets ETF (it might be slightly different for other ETFs) ... http://www.invested.com.au/7/emerging-markets-managed-fund-37097/#post74915