Funds in non-GBP currencies

[bernie]

What are the implications of buying a fund in a foreign currency, such as https://www.hl.co.uk/funds/fund-discoun ... cumulation, which is in EUR?

The reason or my question is that I am doing some backtesting, and I want to know if I need to take into account currency conversions.

[bernie]

i.e.

Suppose I buy a £100 of a fund that is in USD, and it goes up in price from $100 to $101.

Will I have made £1 profit? Or will I also need to take into account the movement of the GBPUSD exchange rate?

[jaizan]

If the price is quoted in USD and you want to measure your performance in GBP, of course you will have to convert back from USD to GBP.

1 Calculate the cost in GBP at the exchange rate prevailing at the time of purchasing
2 Calculate the current GBP valuation using the current exchange rate.

You can set up a google spreadsheet to do this automatically for stocks and perhaps it would work for funds, if google have fund prices.

Also, I don't know how it works with funds, but some of the brokers charge some fairly obscene foreign exchange spreads for buying overseas stocks.
1.5 ~1.75% is not unknown. That's just price gouging.

[bernie]

I had a confusing email from my broker saying that all these funds are actually traded in GBP, which confused me.

I guess the only way to find out what happens is to place some minimum size orders and see what happens.