I do not understand the concept of currency risk and hedging sufficiently. Can anyone explain?

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https://www.bogleheads.org/wiki/Non-US_investors_and_ETF_currencies

https://www.bogleheads.org/wiki/Currency_risk_for_non-US_investors

I read through these. This line jumped out at me :

" For example, for an Ireland domiciled ETF traded in Euros (EUR) but holding only US stocks, the currency risk is between only your local currency and US dollars (USD). That is, it is the currency of the assets that the ETF holds, not the ETF's trading or denomination currency, that matters."

I plan to buy Vanguard LifeStrategy, which is hedged to the EUR AFAIK. However, it is a US fund. So does it mean the only thing that matters is my currency as compared to USD?

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Paradoxbuilder

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Posted: 1 year ago
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