HTA.A OR HTA.B?

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Loioking to invest in the subject Harvest ETF’s. Wondering which one to buy, or a combination of both. I realize one is hedged.

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Asked on December 2, 2024 12:22 pm
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This is all personal preference really.

If you are worried about fluctuations in the CAD/USD negatively impacting your returns, hedged would be the way to do. It eliminates this risk. In a situation like this, a hedged ETF would protect you if the USD weakens against the CAD. So for example right now (with just some ballpark numbers as an example) the CAD is $0.71 USD. If you buy a unhedged fund and the CAD goes to $0.781, you've lost 10%~ in currency fluctuations. With a hedged fund, you wouldn't.

It is said that with a hedged ETF you own the underlying holdings, and with an unhedged ETF you own the holdings and the currency.

In my opinion, the longer the time horizon, the less the need to hedge, because currency fluctuations tend to even out over the long-term and all you end up doing is paying hedging fees to end up back at the same spot. However, we're in a bit of a tricky time now as the CAD is historically weak.

If you believe the CAD will continue to weaken against the USD (CAD go down) hedging will hurt you. If you believe the CAD will rise, hedging will help you.

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Posted by Dan Kent
Answered on December 3, 2024 8:15 am