VGAD - Vanguard MSCI Index International Shares (Hedged) ETF

[MrCheapo]

With the dollar at 62 cents to the US dollar it seems now is not a good time to invest in overseas funds. But I have a sizable amount I'd like to get into the market in 2023 or at latest early 2024.

I have NAB trading and Vanguard brokerage platform accounts. One option seems to be go to use the hedged funds such as https://www.vanguard.com.au/personal/invest-with-us/fund?portId=8101 which claim to minimize currency issues.

Any insights into this fund and their claims would be appreciated.

Thanks!

 

[divs4ever]

With the dollar at 62 cents to the US dollar it seems now is not a good time to invest in overseas funds. But I have a sizable amount I'd like to get into the market in 2023 or at latest early 2024.

I have NAB trading and Vanguard brokerage platform accounts. One option seems to be go to use the hedged funds such as https://www.vanguard.com.au/personal/invest-with-us/fund?portId=8101 which claim to minimize currency issues.

Any insights into this fund and their claims would be appreciated.

Thanks!

is the currency hedging appropriate for YOU ??

the cost impacts of hedging eat into any profit , but how important is the reduction of currency risk ( those costs might be worth it )

check out something like BHP which declares dividends in $US but helpfully pays in your local currency , and study if a weak Australia Dollar is better for you or you need to reduce that impact

now using an ETF to access the international markets is one thing but do you need all the 'bells and whistles ' ( currency hedging , gearing etc etc )

PS i don't hold/use this fund

good luck

 

[MrCheapo]

is the currency hedging appropriate for YOU ??

the cost impacts of hedging eat into any profit , but how important is the reduction of currency risk ( those costs might be worth it )

check out something like BHP which declares dividends in $US but helpfully pays in your local currency , and study if a weak Australia Dollar is better for you or you need to reduce that impact

now using an ETF to access the international markets is one thing but do you need all the 'bells and whistles ' ( currency hedging , gearing etc etc )

PS i don't hold/use this fund

good luck

Thanks. I invest heavily in the US in individual stocks and love it. But I don't have the time (or knowledge) to understand Australian stocks hence the focus on funds.

I grew up in Oz, but now live in the USA.

 

[divs4ever]

residing in the US makes a big difference , business is business but the local politics where you invest can be a real minefield

the global economy is rather fragile , take care

cheers

 

[Dona Ferentes]

Thanks. I invest heavily in the US in individual stocks and love it. But I don't have the time (or knowledge) to understand Australian stocks hence the focus on funds.

I grew up in Oz, but now live in the USA.

this isn't an ETF of Aust stocks, its a locally based of international stocks, indexed and hedged for currency,

.
has it got an ASX code?

 

[Joe Blow]

this isn't an ETF of Aust stocks, its a locally based of international stocks, indexed and hedged for currency,

.
has it got an ASX code?

The link provided in the first post indicates that there is an unlisted managed fund and a listed ETF. As most people are probably more likely to invest via a listed ETF I have edited the thread title and moved it to the ETFs A-Z forum.

 

[Dona Ferentes]

Vanguard MSCI Index International Shares (Hedged) ETF (VGAD) seeks to track the return of the MSCI World ex-Australia (with net dividends reinvested), hedged into Australian dollars Index, before taking into account fees, expenses and tax.

Fund overview​

The ETF provides exposure to many of the world’s companies listed on the exchanges of major developed economies around the world. The ETF offers low-cost access to a broadly diversified range of securities that allows investors to participate in the growth potential of international companies listed outside of Australia. The ETF is hedged to Australian dollars so the return (income and capital appreciation) of the ETF is relatively unaffected by currency fluctuations.

Suitability​

Investors seeking exposure to a diversified portfolio of international shares that is relatively unaffected by currency fluctuations.

Management Fees 0.21 per cent pa

 

[Belli]

VGAD has been listed on the ASX since November 2014. I did look at it but stuck my adage to stay away from hedged products.

A quick and dirty comparison with its unhedged counterpart.

 

[MrCheapo]

VGAD has been listed on the ASX since November 2014. I did look at it but stuck my adage to stay away from hedged products.

A quick and dirty comparison with its unhedged counterpart.


View attachment 164183

Thanks, that's useful. Hedging is a great idea if done well. But it appears Vanguard did not here. They have little information in exactly how they hedge.

 

[Belli]

Remiss of me not to mention that VGAD, like other Vanguard products, is a class of units of its underlying fund. Snippet from the PDS.