I'd like to buy S&P 500 ETF on interactive brokers. Since I'm in Europe I have to buy one of ETFs denominated in EUR, CHF or GBP (like VUSA). I'd like to verify that I understand correctly how it works in terms of currency exchange. In a hypothetical situation if I have bought S&P ETF in euro and euro appreciates against the dollar while S&P 500 index stays the same price (in dollars), my ETF would go down in value?
1 Answer
Yes, if the value of the asset in its home currency remains the same but the value of the exchange currency changes - the value of your asset in exchange currency changes accordingly.
