For instance, an investor owning a US stock that pays a 4 % dividend is losing 8 basis points or so (
assuming currency conversion costs 2 %).
We could
assume currency conversion costs of 1.5 % each way, annualized stock market returns of 7 %, hedging penalty of 1 % and work out who comes out ahead for (1) US dollar remains the same.
Not exact matches
All
currency conversions (CAD converted to USD prior to purchasing USD ETFs, USD converted to CAD prior to purchasing CAD ETFs, USD dividends) will be
assumed to
cost 1.5 percent.