Should I buy CAD hedged ETFs when the Canadian dollar is weak?

S

Shimu

Hi, a Canadian here. If I'm buying a US dollar ETF ie. VOO, should I consider a CAD hedged ETF like VSP while the CAD is very weak? Currently 1 USD = 1.375 CAD (or .7269 the other way).

Thanks for the advice.
 
What do you like about the VOO vs the SPY? (Sorry, I don't have an opinion on the direction of the CAD/USD).

Bob
 
It was for the lower management fee. Sorry, I forgot to clarify that I'm looking to hold these ETFs for a very long time horizon :)
 
I did a bit of googling of this myself not long ago.

I'd suggest you just google " currency hedged etf".

I found many articles with the same overall opinion.

Basically, most of these hedged etf's in the long run don't perform aswell as the non hedged.

They basically said that the cost of hedging these etf's draws down any benefit from them.

Now this was all mostly articles related to longer term investments.

Now id do some more research yourself as right now the u.s dollar is at an abnormal high. One article averaged the us/cad over I think it was 30 years and it came out to about 80 cents to the dollar. So right now we're quite a bit lower then that.
 
VFV.TO is the CAD hedged fund.

Who knows? Whats your opinion on CAD/USD and the SP500 going forward?

http://stockcharts.com/h-sc
Zoom out 3 years.

You get these currency hedged etfs right and a littlt daily tracking error is
Swamped. Vanguard is dirt cheap fees. Workon getting direction right.
 
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Long Term, I am short US Dollar and been takes stabs at finding the lows in Canadian $, have not clue when Canadian $ will bottom, but my system says to be a buyer and option hedged.
 
I do want exposure to S&P 500, but it feels like a bad idea to buy right now being a Canadian. I suppose I'm bullish on the CAD to USD exchange rate in the future, and I feel like forex swings will make me lose money rather than gain money. Does it make sense to buy hedged S&P 500 now and sell when the exchange rate is better, then switch over to the USD ones? This would mitigate the upkeep cost of hedging..
 
I guess if you want to buy and hold sp500 for many years, it does not really matter whether you hedge currency risk or not. I do a lot of short term stuff, so currency hedging is important for me as I try to isolate the drivers of the results.
 
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