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effect of exchange rate

lse:iusa

#1

Hallo all
If the pound rallies against the dollar, could someone clarify if this would affect the value/purchasing power for buyers of this etf?


#2

This etf is priced in pounds, so if the pound rallies then the value of the underlying assets (priced in dollars in the US) will fall relative to pounds and the pound price of the etf will therefore fall. If you bought an etf that was priced in dollars, then you wouldn’t see the effect of the rally until you sold and the value was converted back into pounds. Either way, you are exposed to the underlying currency.


#3

Thanks for that Aiesman, very helpful.

I’ve put this on my watch list to try and get a feel for it.