Hi Guys,
I just want to check something regarding an ETF that is listed on several European stock exchanges. As an example I’m going to use iShares MSCI Europe ex UK ETF (base currency is Euro) and iShares MSCI Emerging Markets (base currency USD). Both ETFs are domiciled in Ireland.
The MSCI Europe ex UK ETF is traded on the London Stock exchange (yahoo ticker = IEUX.L) priced in GBX and Euronext (yahoo ticker IEUX.AS) priced in Euro. I’ve checked the closing price randomly on occasion and when I do the conversion from GBX to Euro they more or less match to within 10 to 15 cents regardless of the fluctuations in the sterling euro exchange rate. This seems to indicate to me that there is no currency risk in purchasing the GBX version of this iShare because the base currency is Euro. Basically if sterling falls against the Euro the price of this iShare on the London stock exchange goes up accordingly. Obviously there are currency commission charges to pay if you buy/sell the GBX version.
Is what i’ve said above correct and if so...
what happens when the base currency of the ETF is in USD, for example iShares MSCI Emerging Markets, traded on the London Stock exchange (yahoo ticker = IEEM.L) priced in GBX and on Euronext (yahoo ticker IEMM.AS) priced in Euro. Again when I’ve checked the GBX closing price against the Euro closing price they’re usually within a few cents of each other. Suppose I buy the GBX version on the LSE. In this instance there are three independent currencies involved but from my point of view the currency risk is with the dollar only and not with any movement of Sterling against the Euro?
Yes/No?
Thks,
Bogle
I just want to check something regarding an ETF that is listed on several European stock exchanges. As an example I’m going to use iShares MSCI Europe ex UK ETF (base currency is Euro) and iShares MSCI Emerging Markets (base currency USD). Both ETFs are domiciled in Ireland.
The MSCI Europe ex UK ETF is traded on the London Stock exchange (yahoo ticker = IEUX.L) priced in GBX and Euronext (yahoo ticker IEUX.AS) priced in Euro. I’ve checked the closing price randomly on occasion and when I do the conversion from GBX to Euro they more or less match to within 10 to 15 cents regardless of the fluctuations in the sterling euro exchange rate. This seems to indicate to me that there is no currency risk in purchasing the GBX version of this iShare because the base currency is Euro. Basically if sterling falls against the Euro the price of this iShare on the London stock exchange goes up accordingly. Obviously there are currency commission charges to pay if you buy/sell the GBX version.
Is what i’ve said above correct and if so...
what happens when the base currency of the ETF is in USD, for example iShares MSCI Emerging Markets, traded on the London Stock exchange (yahoo ticker = IEEM.L) priced in GBX and on Euronext (yahoo ticker IEMM.AS) priced in Euro. Again when I’ve checked the GBX closing price against the Euro closing price they’re usually within a few cents of each other. Suppose I buy the GBX version on the LSE. In this instance there are three independent currencies involved but from my point of view the currency risk is with the dollar only and not with any movement of Sterling against the Euro?
Yes/No?
Thks,
Bogle