pickle

sixpence.

Hello, I have got myself and a bit of a pickle trying to work this out and would appreciate any help:

If one is buying US shares in a fund (through Hargreaves with British pounds) , such as Baillie Gifford American, then is it best to buy when the pound is weak or strong? If one buys when the pound is weak, then is that the equivalent of buying the shares cheap?

Sorry if this is an obvious question but conversions have never been my strong point!

eskbanker

When the pound is weak, it means it buys fewer dollars, so a weak pound isn't a good time to make foreign purchases.

kidmugsy

eskbanker wrote: »

a weak pound isn't a good time to make foreign purchases.

Unless the US market was at attractive (= cheap) valuations. Which it certainly isn't.

EdGasketTheSecond

If you can't work it out, you had better stick to UK stocks and funds.

george4064

Bear in mind that you can always buy a GBP currency hedged fund that invests in US stocks to remove the uncertainty of currency fluctuations (thats if the fund manager offers a GBP hedged share class of the fund).

System

george4064 wrote: »

Bear in mind that you can always buy a GBP currency hedged fund that invests in US stocks to remove the uncertainty of currency fluctuations (thats if the fund manager offers a GBP hedged share class of the fund).

Why would you want to do that? Exchange rate risk is good as it reduces the correlation between the UK stockmarket and the US stockmarket!

masonic

george4064 wrote: »

Bear in mind that you can always buy a GBP currency hedged fund that invests in US stocks to remove the uncertainty of currency fluctuations (thats if the fund manager offers a GBP hedged share class of the fund).

My brief exploration of currency hedged equity funds led me to believe they don't remove the uncertainly of currency fluctuations in practice. If you can point me to a currency hedged US equity fund that delivers on its promise I'd be very interested.

sixpence.

EdGasketTheSecond wrote: »

If you can't work it out, you had better stick to UK stocks and funds.

there's always one lol

I think its fine. I just got myself into a pickle, trying to work out if i should invest this 2k i have before they decide on brexit or after... i recon before if i do foreign stocks cos the value of the pound is going to fall, after if its domestic stocks

Herbalus

sixpence. wrote: »

there's always one lol

I think its fine. I just got myself into a pickle, trying to work out if i should invest this 2k i have before they decide on brexit or after... i recon before if i do foreign stocks cos the value of the pound is going to fall, after if its domestic stocks

You could say that...but then the pound rose slightly when May's Brexit deal was voted down, and that was a certain way of avoiding a 'No Deal'.

eskbanker

sixpence. wrote: »

trying to work out if i should invest this 2k i have before they decide on brexit or after... i recon before if i do foreign stocks cos the value of the pound is going to fall, after if its domestic stocks

For someone who was asking a pretty basic question about currency exchange (no offence), you seem remarkably confident in your economic forecast!

george4064

masonic wrote: »

My brief exploration of currency hedged equity funds led me to believe they don't remove the uncertainly of currency fluctuations in practice. If you can point me to a currency hedged US equity fund that delivers on its promise I'd be very interested.

I agree with you that there is no such thing as a perfect hedge, but I’m sure they do remove a lot of the currency fluctuations vs the unhedged version.

I’m sure you’ve done a lot more research into it, so I don’t disagree with you at all.