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Hello,
I faced the same question about investing in vwrl in chf or euros.
Wouldn’t investing in euros expose me much more to euros/chf exchange rate? Or is that becoming irrelevant because stocks are in multiple currencies anyway?
Who know what this will be in 30 years…
Any thoughts about that exposure?
Yes. Not only that, the underlying stocks are always the same regardless of the currency. So optimize your currency chice in terms of fees and convenience, not risk. 
The Irish Vanguard funds are available in the following currencies:
Which one you should choose boils down to:
- Which currency you have or at what cost can you acquire it. The currency itself makes no difference, as you hold the same ETF share, regardless of it. The price ALWAYS includes the current exchange rate.
- The liquidity/spread. Each row listed above is traded separately. Before you buy, check historical trading volumes and intraday spreads. But, even if there is nobody willing to trade with you, a so called market maker will step in and make the trade.
- The stock exchange. There could be differences in fees, depending on the stock exchange.
To sum up, I would say: if your broker does not offer attractive forex conditions, invest in the currency which you have (CHF). If you are with a broker that DOES offer cheap fx, like IB, exchange to USD and buy the VWRD.L, since it has the largest liquidity.
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Thank you very much for the answers, very helpful.
As I’m using degiro I’ll keep buying the Dutch one in Euros as there’s a free allowance.
Yes, this is the right move unless you are making larger monthly purchases.
The total fee you pay is 0.1% in currency exchange. If you buy on SIX (in francs) it costs € 2.00 + 0.03% (CHF2.11 + 0.03%). So if you are buying <3014CHF of VWRL each month, buy it on the Amsterdam exchange…
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That’s very helpful!
I get the points buying VWRL in USD cuz of the higher liquidity and the better spreads. However, in my understanding, in this case we bet on the development of the ETF and the currency. CHF/USD might be attractive now, but when we need CHF back in 20 years to cover expenses in Switzerland, we might sit on a lot of USD. USD might have depreciated a lot then. Of course, nobody knows. And somehow the price of VWRL in CHF will be quite similar than in USD given the exchange rate cuz of effective arbitrage of market participants.
However, can somebody please elaborate more, why so many of you are fine with buying this ETF in USD and are not worried how the exchange rate might evolve.
Because if you buy a sheep with usd, eur, Bitcoin, or cowry shells, in the end you end up holding the same sheep.
The currency doesn’t matter as explained in the many threads covering that topic, it’s the same assets.
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Thank you. Maybe something is blocking me to really understand that.
The the underlying asset is the same, just expressed in different currencies I get.
But - let’s assume CHF/USD now 1/1.03 and in 20 years it would be 1/0.98. Wouldn’t that be a “loss” if I would need to convert that back then?
Or are you saying, it does not matter, cuz the price of the stock expressed in USD and traded on LSE will be the same than the stock expressed in CHF and traded on SIX - assuming efficient market mechanisms
Let’s imagine an ETF composed of one US company. The price of the stock is 10 USD and so is the ETF share. You buy it now for 9.7 CHF or 10 USD. Then the USD goes down to 0.5 CHF and the stock price goes up to 11 USD. The price of the ETF will be 5.5 CHF or 11 USD. In both case you will get 5.5 CHF back, whatever the ETF version you own.
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What’s the alternative ur suggesting?
Buy a CHF hedged version? Hedging’s expensive. You’re swapping variable currency risk for relatively fixed hedging costs ~= difference in interest rates.
Buy it on SIX in CHF? That’s just trading technicality, at most will save you some fx conversion commission. At the end of the day you will hold exactly the same security no matter whether you paid for it USD or CHF.
You know, like in Switzerland you can pay for your groceries in euros, right? Same thing. At the end of the day you will hold the same basket of groceries no matter whether you paid for in EUR or CHF. Just your trading costs will vary between these two possibilities, shops/banks change euros at unfavorable rates.
Markets have to be efficient down to a penny, when it comes to trading the same product in different currencies. Otherwise you buy it where it’s cheap and sell it where its expensive (arbitrage).
That’s why this is always true:
Price in CHF = Price in USD * current x-rate
Thanks to all of you. I see where you are going, but unfortunately I’m still struggeling.
For me there are three things to consider.
1 - Let’s say today CHF/USD is at 1:1. For this I buy a sheep/groceries/sheep (real stuff) at an US market. Tomorrow CHF/USD is at 0.5:1. Let’s keep the price of the sheep constant. I sell it, get 1 USD for it, convert it back into CHF, cuz I need to cover my expenses in CHF. I get 0.5 CHF. In a way I “lost” 0.5 CHF = 50%, unless the price of the sheep on a CH market dropped to 0.5 CHF as well cuz we are dealing with efficient market. Then it wouldn’t make a difference, whether I bought the sheep in CHF in the first place - correct?
2 - Converting CHF into USD today is a kind of speculation. Today it might be 1:1 and I get one sheep for it in USD. Tomorrow it might be 1:2. Let’s keep the price of the sheep unchanged = 1 USD. Hence, I’ll get 2 sheep instead of only 1. Still the same sheep.
3 - If I hold the CHF in cash instead of buying real stuff, my 1 CHF will still be 1 CHF nominal, regardless of the development of the exchange rates. Of course, I might only get 0.5 sheep, if the sheep is traded globally and all information about it is know at the same time to all market participants.
I would follow the recommendation from Gerd Kommer (german article) and other inverstors (german article) and not using heding. If I’m not mistaken hedgehog from this forum took a strong stand for this position, too.
When you say the largest liquidity, I assume you you refer to trading volume. But then I look at the VWRD.L in London
Until now there were barely 4000 stocks traded and the average is at 44k.
While the Euronext in Amsterdam:
Has a daily already 23k today and 164 thousand average daily.
Or am I misinterpreting something here?
Please search the forum before asking these questions. This has been answered many times here , here , here , here , here , here and here.
So, once and for all, the quotation currency of a security is not important, what matters is in which currency the underlying business is having revenues/paying costs.
Otherwise, if i follow your thoughts, you would be happy holding on Nestle because the stock is quoting in CHF, right? That would be forgetting that Nestle does an immense majority of its business in India, and by holding it you have a big exposure to the Indian Rupee.
But you know what? Why don’t you do an experiment? Why don’t you check the closing prices of VWRL, both in CHF and EUR since the beginning of the year, and compare it to the EUR/CHF rate since the beginning of the year? The fx rate has already moved a few percentage points.
Depending on the results,
- if it really does not matter, then you settled the question for good
- if otherwise it does matter, then you have found a cool arbitrage opportunity
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Based on the fact that you seem to have misunderstood my point, I assume I have phrased the question incorrectly.
You seemed to have gotten very excited about point out the price difference, I was referring to daily and average volume difference.
Next time I’ll mark it in red for you not to confuse you.
Ugh… lets try with a table. Do you understand now?
| Operation | USD in CHF | Sheep in CHF | Sheep in USD | Portfolio | Value in CHF | Value in USD |
|---|---|---|---|---|---|---|
| initial | 1.00 | 10 | 10 | 10 CHF | 10 | 10 |
| buy USD | 10 USD | 10 | 10 | |||
| buy sheep | 1 SHP | 10 | 10 | |||
| fx changes | 2.00 | 20 | 10 | 1 SHP | 20 | 10 |
| sell sheep | 10 USD | 20 | 10 | |||
| sell USD | 20 CHF | 20 | 10 |
If this is addressed to me, I was not answering you, but @gsheert. Sorry if it was not clear.
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If it really is like this, then I remembered it wrong. It’s perfectly possible! 
But I would always look at the website of the exchange itself (LSE) than some third party one. Always check at the source.
Euronext VWRL:
Looks pretty comparable.
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