Currency hedged ETF IUSE

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Investingamateur
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Joined: Sat Oct 05, 2019 5:37 am

Currency hedged ETF IUSE

Post by Investingamateur » Sat Oct 05, 2019 5:44 am

Hi,

I compared SXR8, IUSE and SPY.

Per 30.9.2019 the cumulative 5-year return for SXR8 is 13,58 and for the hedged IUSE 8,09 according to morningstar. (SPY is 14,03).

Why is the return of the hedged IUSE not close to the return of SPY ?

I look forward to your answer because as I understand it the return should be almost the same because it´s currency hedged.

Thanks again for your information!

Best regards

Olav

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oldcomputerguy
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Re: Currency hedged ETF IUSE

Post by oldcomputerguy » Sat Oct 05, 2019 6:55 am

This topic is now in the Non-US Investing forum.
"I’ve come around to this: If you’re dumb, surround yourself with smart people; and if you’re smart, surround yourself with smart people who disagree with you." (Aaron Sorkin)

typical.investor
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Re: Currency hedged ETF IUSE

Post by typical.investor » Sat Oct 05, 2019 7:27 am

Investingamateur wrote:
Sat Oct 05, 2019 5:44 am
Hi,

I compared SXR8, IUSE and SPY.

Per 30.9.2019 the cumulative 5-year return for SXR8 is 13,58 and for the hedged IUSE 8,09 according to morningstar. (SPY is 14,03).

Why is the return of the hedged IUSE not close to the return of SPY ?
Hi and welcome.

IUSE returns are hedged to the EUR correct?

If so, I would expect IUSE returns to be higher than SPY or SXR8 (as measured in EUR) when the EUR is strengthening and less when the EUR is weakening.

EUR has weakened in the last 5 years, and so the returns of IUSE which are in EUR are less than the returns of SPY which is in USD.

You can see this in the opposite direction too. Look at VGK (Vanguard FTSE Europe ETF) where 5 year returns are 3.06%. A fund of European stocks hedged to the dollar returns more (HEDJ WisdomTree Europe Hedged Equity Fund) at 7.17%. The dollar strengthened in that time, so returns were higher than that of the European stocks.

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BeBH65
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Re: Currency hedged ETF IUSE

Post by BeBH65 » Sat Oct 05, 2019 7:34 am

Not sure I see the same numbers as you.

A quick view on m*.com shows me that 10k USD in spy would have grown to almost 15k USD now.
If I look at IUSE in my local Euro m* then I see that 10k euro would have grown to almost 15k euro today.

If these numbers are confirmed, by others,
then iuse seem to have done what it promised.

(Note: not many people know the tickers like that, and tickets can be different in different exchanges (IUSE also seems to be iShares MSCI EM Islamic UCITS ETF USD (Dist) (EUR) | IUSE on the German exchanges ); you will likely get more answers if you give the full fund names)
BeBH65. (only an investment enthusiast, not a financial adviser, perform your due diligence). | Have a look at https://www.bogleheads.org/wiki/Outline_of_Non-US_domiciles

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