Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

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Bkkkiwi
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Joined: Fri Jun 13, 2014 4:37 am

Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by Bkkkiwi »

To complement my Global equity ETF (VWRD), I am having trouble figuring out which bond fund(s) to choose for the bond component. Ideally I want to stick to one fund if possible to maximise simplicity.

I have read extensively through the Bond-centric posts in the forum (thanks to DJN, Glorat, Andrew9999, Valuethinker et al) but it seems the more I read the more confused I get regarding currency risk and hedged & non-hedged funds.

A New Zealander, I am working in (and a tax-resident of) Thailand. I am almost certain to retire in Thailand (in 5 to 10 years time) and my salary depends on the US/THB exchange rate - a weaker USD means a smaller THB pay check.

Non-hedged options include SAAA (with exposure to 50% euro, and 20% euro) and IGLO (44% USD, 25% euro, 20% JPY).

IGLO aslo has hedged versions (USD, Euros, GBP).

I am unsure which of these options (or others) would work best for my circumstances.

Any insights would be gratefully received :)
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galeno
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Re: Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by galeno »

You should go for ONE USD hedged world bond UCITS ETF. VAGU or AGGU.

Your currency is pretty tightly tied to the USD.
KISS & STC.
andrew99999
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Re: Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by andrew99999 »

This is my favourite article on it.
What is the minimal risk asset?
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galeno
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Re: Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by galeno »

It's REALLY tough to beat an intermediate term US treasury fund or ETF.
KISS & STC.
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abuss368
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Re: Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by abuss368 »

galeno wrote: Sat Apr 17, 2021 6:15 am You should go for ONE USD hedged world bond UCITS ETF. VAGU or AGGU.

Your currency is pretty tightly tied to the USD.
This is excellent advice.
Tony
John C. Bogle: “Simplicity is the master key to financial success."
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abuss368
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Re: Bond ETF - Hedged or Unhedged ? for non-US Thai based investor

Post by abuss368 »

galeno wrote: Sat Apr 17, 2021 1:11 pm It's REALLY tough to beat an intermediate term US treasury fund or ETF.
I think it is thought to beat any investment grade short or intermediate term bond fund that is low cost and diversified. Nothing else is needed.

Tony
John C. Bogle: “Simplicity is the master key to financial success."
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