Comments on: Currency Effects of Buying Foreign Stocks or ETFs on US Exchanges http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/ Helping you invest and prosper Sun, 12 Feb 2012 00:54:40 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Today’s economy media pack – 2009.06.05 | BrighterLife.ca http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-1255845 Today’s economy media pack – 2009.06.05 | BrighterLife.ca Fri, 16 Dec 2011 15:29:53 +0000 http://www.canadiancapitalist.com/?p=2495#comment-1255845 [...] Canadian Capitalist. Currency effects of buying foreign stocks or ETFs on U.S. exchanges. “ETFs that hold foreign stocks or foreign stocks trading on U.S. exchanges do not expose you to CAD/USD fluctuations.” [...] [...] Canadian Capitalist. Currency effects of buying foreign stocks or ETFs on U.S. exchanges. “ETFs that hold foreign stocks or foreign stocks trading on U.S. exchanges do not expose you to CAD/USD fluctuations.” [...]

]]> By: Sleepy Portfolio 3Q-2011 Report Card | Canadian Capitalist http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-960745 Sleepy Portfolio 3Q-2011 Report Card | Canadian Capitalist Mon, 03 Oct 2011 16:41:05 +0000 http://www.canadiancapitalist.com/?p=2495#comment-960745 [...] well losing 8.7 percent. Since half the value of the Sleepy Portfolio is denominated in US dollars (note that though VEA and VWO are denominated in US dollars, Canadian investors are exposed to curren...) , the loss in value of the Canadian dollar helped cushion the steep drop in stock values. As of [...] [...] well losing 8.7 percent. Since half the value of the Sleepy Portfolio is denominated in US dollars (note that though VEA and VWO are denominated in US dollars, Canadian investors are exposed to curren…) , the loss in value of the Canadian dollar helped cushion the steep drop in stock values. As of [...]

]]> By: Performance of the Currency-Neutral MSCI EAFE Index Fund | Canadian Capitalist http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-218442 Performance of the Currency-Neutral MSCI EAFE Index Fund | Canadian Capitalist Wed, 05 May 2010 02:56:20 +0000 http://www.canadiancapitalist.com/?p=2495#comment-218442 [...] I’ve looked at the tracking error of S&P 500 currency-neutral funds in past years but the tracking errors in the iShares CDN MSCI EAFE 100% Hedged to CAD Dollars Index (TSX: XIN) remained a mystery because I didn’t have the annual return data for the MSCI EAFE Index* in local currency. XIN holds the iShares MSCI EAFE Index fund (NYSE Arca: EFA) and hedges the foreign currency exposure so that the returns of stocks will not be impacted by changes in the exchange rates between Canadian Dollars and Yen, Pound, Euros and other currencies. (As an aside note that even though EFA trades in the US, Canadian investors holding EFA are not affected by fluctuations in the exchange rate between the CAD...). [...] [...] I’ve looked at the tracking error of S&P 500 currency-neutral funds in past years but the tracking errors in the iShares CDN MSCI EAFE 100% Hedged to CAD Dollars Index (TSX: XIN) remained a mystery because I didn’t have the annual return data for the MSCI EAFE Index* in local currency. XIN holds the iShares MSCI EAFE Index fund (NYSE Arca: EFA) and hedges the foreign currency exposure so that the returns of stocks will not be impacted by changes in the exchange rates between Canadian Dollars and Yen, Pound, Euros and other currencies. (As an aside note that even though EFA trades in the US, Canadian investors holding EFA are not affected by fluctuations in the exchange rate between the CAD…). [...]

]]> By: Today’s economy media pack – 2009.06.05 | Today's economy blog http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-207194 Today’s economy media pack – 2009.06.05 | Today's economy blog Wed, 23 Dec 2009 19:41:35 +0000 http://www.canadiancapitalist.com/?p=2495#comment-207194 [...] Canadian Capitalist. Currency effects of buying foreign stocks or ETFs on U.S. exchanges. “ETFs that hold foreign stocks or foreign stocks trading on U.S. exchanges do not expose you to CAD/USD fluctuations.” [...] [...] Canadian Capitalist. Currency effects of buying foreign stocks or ETFs on U.S. exchanges. “ETFs that hold foreign stocks or foreign stocks trading on U.S. exchanges do not expose you to CAD/USD fluctuations.” [...]

]]> By: Raphael http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-193244 Raphael Thu, 11 Jun 2009 16:52:59 +0000 http://www.canadiancapitalist.com/?p=2495#comment-193244 I was just reading about the Claymore CWO Emerging Markets ETF which hedges the US/CAD, but leaves investers exposed to the exchange risk between the various emerging markets and the US$. I know very little about exchange risk but based on the above entries, does this not mean CDN investors are actually at a greater exchange risk by this strategy? I was just reading about the Claymore CWO Emerging Markets ETF which hedges the US/CAD, but leaves investers exposed to the exchange risk between the various emerging markets and the US$.
I know very little about exchange risk but based on the above entries, does this not mean CDN investors are actually at a greater exchange risk by this strategy?

]]> By: MoneyEenergy http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-193054 MoneyEenergy Sun, 07 Jun 2009 17:10:06 +0000 http://www.canadiancapitalist.com/?p=2495#comment-193054 Ha - I guess I should also read all of the other comments - all I wish is that Canada would start to decouple more of its trading from the US - we need to diversify our trading partners. It's silly to be so tied to one and subject to most of its troubles. Ha – I guess I should also read all of the other comments – all I wish is that Canada would start to decouple more of its trading from the US – we need to diversify our trading partners. It’s silly to be so tied to one and subject to most of its troubles.

]]> By: MoneyEenergy http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-193053 MoneyEenergy Sun, 07 Jun 2009 17:06:58 +0000 http://www.canadiancapitalist.com/?p=2495#comment-193053 You know, this is the only place anywhere that I've ever seen this attempt to be explained.... and I have done some reading.... I follow your own example, i.e., the first half of the article, but Dave's examples are a bit confusing - I'll have to read those again. Basically I can see how your own example is correct, but that was in a case where both the Yen and the USD went up against the loonie, so it had a "good" currency effect, so to speak. If the Yen were to drop severely I think it would still have a negative impact on the Canadian's return/value. But this is a really important question I've been wondering about, ie., in relation to the US dollar. For thought experiment purposes, say I own Honda ADRs in US dollars and the dollars are becoming severely inflated, so that they fall sharply in relation to the Yen (let's say). How does this play out on the Canadian end if the greenback has also fallen against the loonie? You know, this is the only place anywhere that I’ve ever seen this attempt to be explained…. and I have done some reading…. I follow your own example, i.e., the first half of the article, but Dave’s examples are a bit confusing – I’ll have to read those again.

Basically I can see how your own example is correct, but that was in a case where both the Yen and the USD went up against the loonie, so it had a “good” currency effect, so to speak. If the Yen were to drop severely I think it would still have a negative impact on the Canadian’s return/value.

But this is a really important question I’ve been wondering about, ie., in relation to the US dollar. For thought experiment purposes, say I own Honda ADRs in US dollars and the dollars are becoming severely inflated, so that they fall sharply in relation to the Yen (let’s say). How does this play out on the Canadian end if the greenback has also fallen against the loonie?

]]> By: The Financial Blogger » Blog Archive » Financial Ramblings http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-193016 The Financial Blogger » Blog Archive » Financial Ramblings Sat, 06 Jun 2009 10:00:54 +0000 http://www.canadiancapitalist.com/?p=2495#comment-193016 [...] Canadian Capitalist explains the currency effects on ETF’s. [...] [...] Canadian Capitalist explains the currency effects on ETF’s. [...]

]]> By: Andy http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-192999 Andy Fri, 05 Jun 2009 19:52:24 +0000 http://www.canadiancapitalist.com/?p=2495#comment-192999 Good article clearing up a common misconception. I would add two reasons why holding international assets (ETFs) in a US dollar denominated account makes a lot of sense 1) Access to very low MER exchange traded funds (ie. Vanguard). 2) The CAD/ USD exchange rate has tended to move in synchronization with the markets (an up market day is almost always an up day for the Canadian dollar). If you can separate the day you sell an equity, from the day you repatriate into Canadian dollars you can often squeeze out an additional 2 or 3% return. Good article clearing up a common misconception.

I would add two reasons why holding international assets (ETFs) in a US dollar denominated account makes a lot of sense

1) Access to very low MER exchange traded funds (ie. Vanguard).

2) The CAD/ USD exchange rate has tended to move in synchronization with the markets (an up market day is almost always an up day for the Canadian dollar). If you can separate the day you sell an equity, from the day you repatriate into Canadian dollars you can often squeeze out an additional 2 or 3% return.

]]> By: Weekend Articles for Your Reading Enjoyment! | Colourful Money - Helping Canadians Achieve Financial Independence In Any Economic Climate http://www.canadiancapitalist.com/currency-effects-of-buying-foreign-stocks-or-etfs-on-us-exchanges/#comment-192992 Weekend Articles for Your Reading Enjoyment! | Colourful Money - Helping Canadians Achieve Financial Independence In Any Economic Climate Fri, 05 Jun 2009 16:31:51 +0000 http://www.canadiancapitalist.com/?p=2495#comment-192992 [...] Canadian Capitalist discusses the currency effects of buying foreign stocks or ETFs on US exchanges. [...] [...] Canadian Capitalist discusses the currency effects of buying foreign stocks or ETFs on US exchanges. [...]

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