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ETF currency risk

  • 21-04-2010 4:54pm
    #1
    foxyboxer
    Closed Accounts Posts: 3,528 ✭✭✭


    When investing through ETF's (in this case db x-trackers), what is the situation with currency risk?

    I the ETF's base currency is for example EUR and the Trading currency is GBP what effect does this have for irish investors?

    Is there a charge for investing with EUR on a GBP traded etf?
    This is incredibly confusing.

    Any help would be appreciated.


Comments

  • #2
    silverharp
    Registered Users, Registered Users 2 Posts: 18,854 ✭✭✭✭silverharp


    if I have you right it's a euro instrument trading on a UK exchange. you dont have a currency risk in the normal sense in that your euro funds (I assume) are invested in a euro investment. If GBP dropped 10% your ETF would rise by roughly the same amount even if the underlying security didnt change in price.
    There are clearily implicit currency risks in all international investments if the undelying investment is based in a county with a different currency to your own

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