Anyone got a calculator for exchange rate effects on unhedged ETFs (or foreign stocks etc)?

[StockyGuy]

Thinking of grabbing some unhedged ETFs. So I'm looking for some online calculator that will let me quickly find what my holding will be worth in AUD if the ETF underlying held in USD goes up or down 10% (or whatever %) but the AUD goes up or down 5 cents (or whatever).

I expect there's something like that somewhere on the web, but I could not find it. (And yes I'm sure some people can just do that calculation pretty well in their head )

Any ideas?

 

[divs4ever]

Thinking of grabbing some unhedged ETFs. So I'm looking for some online calculator that will let me quickly find what my holding will be worth in AUD if the ETF underlying held in USD goes up or down 10% (or whatever %) but the AUD goes up or down 5 cents (or whatever).

I expect there's something like that somewhere on the web, but I could not find it. (And yes I'm sure some people can just do that calculation pretty well in their head )

Any ideas?

good luck with that

i held two companies that essentially went bankrupt trying to hedge against currency fluctuations , because they had a large overseas client base

keep a lookout for any notes on time delay those lags could be painful

another option is just plonk in the order you what to buy or sell at and WAIT ( like i am doing with BEAR where i have a buy ( extra ) order in as well as a reduce on an existing holding )

clumsy sure but last Friday the NBN and computer messed up , letting two orders fill while i was attempting to change them

 

[Sharkman]

Don't need a complex online calculator. The old Casio from high school will do the job. Just multiply the percentage moves together, but negate and reciprocal the FX move first, as USD needs to be the base currency but by market convention it's quoted as AUD/USD.

Eg. If the ETF holds $100B USD worth of underlying and AUD/USD is 0.65, it holds ~$153.85B AUD. Then the ETF rallies by 5% but AUD/USD also rises to 0.67. This is a (0.67-0.65)/0.65 = 3.08% rise in AUD but a ((1/0.67)-(1/0.65))/(1/0.65) = 3% fall in USD/AUD, so 1.05 * (1-0.03) = ~1.85% gain in AUD terms. So the next day it holds $105B / 0.67 = ~$156.72B AUD, which is 1.85% higher than $153.85B.

The market prices may not reflect this exactly due to fluctuation, but they will be close (compare IVV vs IHVV for example, they hold the same underlying assets but the latter is hedged, the former isn't). The difference in the daily moves between the two will usually be very close to the FX movement between 4 pm the previous day to the time of observation.

 

[StockyGuy]

Don't need a complex online calculator. The old Casio from high school will do the job. Just multiply the percentage moves together, but negate and reciprocal the FX move first, as USD needs to be the base currency but by market convention it's quoted as AUD/USD.

Eg. If the ETF holds $100B USD worth of underlying and AUD/USD is 0.65, it holds ~$153.85B AUD. Then the ETF rallies by 5% but AUD/USD also rises to 0.67. This is a (0.67-0.65)/0.65 = 3.08% rise in AUD but a ((1/0.67)-(1/0.65))/(1/0.65) = 3% fall in USD/AUD, so 1.05 * (1-0.03) = ~1.85% gain in AUD terms. So the next day it holds $105B / 0.67 = ~$156.72B AUD, which is 1.85% higher than $153.85B.

The market prices may not reflect this exactly due to fluctuation, but they will be close (compare IVV vs IHVV for example, they hold the same underlying assets but the latter is hedged, the former isn't). The difference in the daily moves between the two will usually be very close to the FX movement between 4 pm the previous day to the time of observation.

Very nice, thanks But yeah I was just wanting a nice little online calculator for easy plugging in of the variables for apes like me Just to help wargame out various scenarios, with different ETFS for long term holds over a decade or two. Our dollar versus USD could do anything over the longer term, either enhancing or destroying gains in say an unhedged NASDAQ ETF.

 

[Sharkman]

Very nice, thanks But yeah I was just wanting a nice little online calculator for easy plugging in of the variables for apes like me Just to help wargame out various scenarios, with different ETFS for long term holds over a decade or two. Our dollar versus USD could do anything over the longer term, either enhancing or destroying gains in say an unhedged NASDAQ ETF.

Open up a spreadsheet, put starting (USD) value of the fund in A1, ending value in A2, starting AUD/USD in B1, ending AUD/USD in B2, and put this into another cell

=((1+(A2-A1)/A1)*(1+((1/B2)-(1/B1))/(1/B1)))-1

You can then fiddle around with the first four numbers and it'll tell you what the approximate move in AUD terms is.