I have a basic understanding of currency hedging, but I have a question that I find a little difficult to explain.
Say I'm a New Zealand investor wanting to invest in US ETFs.
I understand that once I hold a non-NZD ETF, hedging will make NZD/USD differences (more or less) invisible to me.
BUT, if I have no holdings in non-NZD ETFs AND the NZD is currently depressed against the USD, does the fact that the ETF is hedged provide me any benefit?
To bring it into reality, the NZD is currently in the toilet, and I have options of investing in hedged or unhedged vehicles. I know that AFTER I'm invested, the hedging will protect me from further NZD drops, but I'm wondering if it makes any difference to the value of what I get for my money today, if I have no current holdings.
Thanks!
Submitted April 23, 2019 at 01:29AM by mattparlane http://bit.ly/2DqQQY4
