No. of Recommendations: 10
For a know-nothing US based investor with all USD assets trying to hedge against the dollar falling over time, would it be “easier/safer” to buy a basket of foreign stocks rather than foreign currencies?
PS
One possibility one might consider having a look at is is one of the funds that tracks the "MSCI World EX-US Equal Weight Index". This tracks large equities in Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the UK.
I can't find a fund in the US (ETF or mutual) that tracks it, but there are several in Europe. One ETF is IE000OEF25S1 from Invesco. I find conflicting information on line, but a US person may be able to buy a UCITS ETF. (a registered European fund). You may have to be a "qualified investor" under US rules, and/or you may need to have a broker who is that more worldly than most.
Many European UCITS funds reinvest all the dividends. I really have no idea what the tax implications of that are for a non-European investor. It might simplify paperwork even if there is no tax advantage.
Note, there is another index with *almost* the same name, MSCI ACWI ex USA Equal Weighted Index. The "all countries world index" variant means you get a lot of Chinese stocks as well. I wouldn't go for that one, myself,. so skip it if it has the "ACWI" part in the name.
Top 10 holdings recently
Company/country/weight in this fund/weight in the cap-weight index/sector
SAAB B SE 0.19 0.07 Industrials
RHEINMETALL DE 0.19 0.33 Industrials
THALES FR 0.18 0.13 Industrials
DASSAULT AVIATION FR 0.18 0.03 Industrials
SINGAPORE TECH ENGR SG 0.18 0.04 Industrials
LEONARDO IT 0.18 0.10 Industrials
KONGSBERG GRUPPEN NO 0.17 0.07 Industrials
ELBIT SYSTEMS IL 0.17 0.05 Industrials
E.ON DE 0.17 0.18 Utilities
JDE PEETS NL 0.16 0.02 Cons Staples
About 20% industrials, about 20% financials, the rest pretty diversified.
Largest country weight is 24% to Japan. But of course no company-specific concentration...largest is 0.19% of the fund at the last report I found, as there are 776 holdings equally weighted.
Jim
