Hedged vs Unhedged - Comparing Vanguard's International ETFs

[@carllee8286]

Hi Sanjee, thanks for another great video. Just wondering with BRICS/dedollarisation/ and its new currency - do you think hedged will be better going forward for long term aussie investors? Cheers!

[@babupatel9368]

Thanks Sanjee; I have one question : supposed I buy ETF today has "No currency hedged" say AUD $10,000 investment (0.74 USD rate). down the line - in 2022; when I will sell it - suppose - AUD will perform better than USD say ( 0.84 USD rate) ; is there any benefit of currency movement where there is no currency hedged ETF? I say No, am I correct ?

[@SanjeeSen]

Hi Babu, assuming the underlying companies don't really change - then yes the currency movement would actually work against you. So yes you're right in saying there wouldn't be any benefit in holding the no currency hedged ETF.

[@financialfreedomengineer1598]

Great video Sanjee. Australians tend to have a home country bias so these ETF's are a great way to add some international diversification to our portfolios

[@SanjeeSen]

Thanks FFE! It was actually one of your articles that got me thinking about it. I'm slowly trying to boost my international exposure in my portfolio.

[@hv0e25]

Thank you Sanjee. You have a good, calm and honest way of explaining complex things.

[@SanjeeSen]

You're most welcome

[@petejames1326]

@@SanjeeSen im looking at VGS.ax is there a US listed equivilent of VGS on the NYSE? because VGS is UNHEDGED isnt it? so if the AUD$ drop to say 60cUS the ETF goes up, if the AUD$ go up to 80cUS the ETF falls right?

[@payroll970]

Excellent explanation

[@SanjeeSen]

Thanks!

[@xavxav3250]

Excellent video Sanjee! your tone and speed makes it easier to understand. Do you suggest go half and half VGS and VGAD. Im new to the investing world and I'm not sure which one to choose, I believe the AUD will be stronger than the USD soon, as the US keeps pumping money. Any suggestion of which one to choose base on the current global scenario?

[@SanjeeSen]

Hi Xav, this is a great question. I agree, I think the AUD is probably about to go into a period where it'll get stronger against the USD. However I'm not sure haha! I don't think any of us could be sure. 50 - 50 VGS and VGAD is a very reasonable strategy in general. Also it's important to note something like VGS actually has multiple currencies (even though USD is the most), we need to consider the impact of AUD against those other international currencies. That's why I think it makes sense to also go 100% VGAD if you're just interested in the international market gains and don't want to deal with the fluctuations of the currency.

[@sheilawidjaja7331]

Hi Sanjee. Thanks for the informative video. Quick question, what is your opinion of buying both VGAD and VGS? Thanks.

[@SanjeeSen]

Hi Sheila, great question! I think it's perfectly fine. I've started doing it myself!

[@nirmaal2255]

I am an international student. Let's say I have no ethical ETFs.(VAS/VGS) will that be an issue for me in the future?

[@Ms12213]

Hey Sanjee - great informative videos! Thank you. Looking forward to your new videos in 2023.

[@Baz.a]

Thanks for sharing the knowledge, I was looking for a comparison between VGS & VGAD and now it makes more sense. could you also do a comparison between VOO & IWLD?

[@myfriendshankar]

Any idea why VGAD dropped so much compared to VGS recently ????

[@thomasdaly1968]

Hi Sanjee, any idea why VGAD dropped so much yesterday? Thanks. T

[@mercedeszacuto9774]

Thank you Sanjee, you saved me a lot of time of research.

[@brentonasmith]

Great video and very clear explanation, thank you

[@SanjeeSen]

No worries Brenton! I'm actually cooking another video on Hedged vs Unhedged - hoping to come out soon.

[@simon_harrison]

Great video mate, really enjoyed this one.

[@SanjeeSen]

Thanks Simon! Glad you liked it!

[@joshuachellew]

Brilliant explanation and analysis.

[@michaelm4970]

Thanks Sanjee

[@robbierolla]

Love your content mate, format, tone, the works. Have been gorging on them for days since coming across your channel. Many tks.

[@SanjeeSen]

Glad you like them!

[@verjanso6025]

So , in short, VGAD is more safe, right?

[@SanjeeSen]

Hi Verjanso, generally yes - it'll more around less. The way I see it is - VGS returns = Currency movements + Underlying company movements. Whereas, VGAD returns = Just underlying company movements. So you're cancelling out the variation that comes from AUD fluctuations. But it also means you might miss out on the gains that come from the AUD moving in a favourable way.

[@tsingh7491]

@@SanjeeSen Thanks for the video. Great Job. Following on the same topic, say an investor is of the opinion that AUD will fall against USD as in USD will start to get it gains back in the foreseeable future. Is VGAD (Hedged) a better choice?

[@SanjeeSen]

@@tsingh7491 Hi T Singh, in that case the unhedged version would be better "VGS" .

[@TheRealPlethZorb]

Cheers legend

[@SanjeeSen]

No worries!