--- title: '¿Cuánto dinero pierdes o ganas cubriendo divisa en ETFs?' source: 'https://youtube.com/watch?v=AcnyUOM7r-I' video_id: 'AcnyUOM7r-I' date: 2026-08-06 duration_sec: 600 --- # ¿Cuánto dinero pierdes o ganas cubriendo divisa en ETFs? > Source: [¿Cuánto dinero pierdes o ganas cubriendo divisa en ETFs?](https://youtube.com/watch?v=AcnyUOM7r-I) ## Summary This video tackles a common question for European investors: should you hedge the dollar/euro currency risk when buying US ETFs like the S&P 500? The presenter compares hedged and unhedged versions of the same index fund, quantifies the extra cost at 0.13% per year, and lays out a clear rule — skip hedging for long-term equity investments, but hedge dollar-denominated fixed income. ### Key Points - **Two Versions of the Same S&P 500 ETF** [00:16] — The video compares an unhedged S&P 500 ETF with a EUR-hedged version. The word 'hedged' in the product name signals that currency risk is covered. - **Hedged Products Cost More** [00:56] — Profitability of hedged and unhedged versions is similar, but hedged financial products always carry slightly higher commissions. - **Three Factors Decide the Question** [01:11] — The decision depends on: (1) returns net of fees, (2) how the euro fluctuates against the dollar over time, and (3) your investment time horizon. - **Fee Comparison: 0.07% vs 0.20%** [02:37] — The unhedged S&P 500 ETF charges 0.07% annually; the hedged version charges 0.20%. Both are far cheaper than traditional banks, which charge 1.5-2% per year. - **Hedging Adds Just 0.13% Per Year** [03:33] — The fee difference between hedged and unhedged is only 0.13% annually — a small price for currency protection. - **Impact on Long-Term Returns** [03:47] — With an average 8% annual S&P 500 return, hedging reduces it to 7.87%. Over 20 years, that's 160% vs 157% total return — a 3% difference. - **Equities Trend Up, Currency Moves Sideways** [04:42] — Since 1980 the S&P 500 has an upward trend, while the dollar/euro rate has been range-bound. In 2026 the rate (0.85-0.86) matches levels from 2020, 2017, 2014, 2003, and even 1980. - **The 2008 Comparison** [05:56] — Since 2008 the S&P 500 has risen about 800%, while the euro/dollar rate changed only about 20%. Long-term currency fluctuations barely affect equity returns. - **Big Investors Don't Hedge Long-Term Equities** [06:23] — The largest investors typically don't hedge currency on long-term equity positions; hedging is optional if you want extra safety and don't mind higher fees. - **Fixed Income Is Where Hedging Makes Sense** [06:35] — Currency hedging is worthwhile for fixed income with dollar exposure and for short-term goals, not for long-term equity index funds. - **The 17% Currency Crash Example** [06:49] — For a 3-year goal, a 17% drop in the dollar against the euro can wipe out a 2-4% annual fixed income return and push the investment into the red. - **Real Portfolio Example: Indexa Capital** [07:45] — In Indexa Capital robo-advisor portfolios, equity funds like the Vanguard US500 are left unhedged, while US government and corporate bond funds carry the 'hedged' label. European bond funds need no hedging since they're in euros. ## Transcript in your investments. That is, the issue of the risk of the dollar currency against the euro, which is very common when we are investing in ETFs, index funds. What is more worthwhile? What exactly should I do? I'll give you a very easy example. Look, here we have the Eharescore here we have the Eharescore [music] SP500 ETF that invests in the SP500. And here we also have an SP500 ETF, but in this case it is eurged, meaning that here we do have the currency hedged. When you see the word [music] currency hedged. When you see the word [music] Hedchual, make sure it [music] that they teach you in the way they teach it to you at the end, but it will only be covered if the title says hedged. Okay, that's for starters. So, [music] we will have to look at the profitability of both, which will be very similar, although there is a small difference due to the issue of commissions, always implies that the commissions [music] are a little higher, because financial products so that you have the currency covered. So, profitability with its fees on one hand, then we have to see how the euro fluctuates against the dollar over time, and third, what is your investment time horizon investing in a product like this that is focused on the long term. this that is focused on the long term. I'm going to invest in the SP500 for 20 years, rather than another type of investment. I'm going to invest more in fixed income, in an ETF of European government bonds, although in this case they are already in euros, or not, because they are already in euros directly. I mean a bond ETF, fixed income, but from the United States government, which would then be in dollars and we can hedge the currency or not. But if you only want to invest for 5 years for a specific goal, then you wouldn't invest as much in equities like an S&P 500 and you would invest more in fixed income like a US bond ETF . So, depending on your investment time horizon , as I said, it also affects whether you are more interested in having it covered or not. Let's look at the numerical examples. Okay, to start with, the most typical example is a well-diversified ETF or index fund, SP500 or MSFW for 20-30 years. We can see these two products that I was comparing to you, one that does not contain HCH and one that does contain HGCH. Let's look at the commissions. If I scroll down here, I can see that it has commissions of 0.07%, which is considered low, it's superb, it's almost nothing. In fact, this is how much you will pay in fees on your invested capital each year. This is how it reads. However, in this other product, which is indeed a Hedgech, we're going to see that the commissions are going to be higher. Here we have it, which is 0.20% of your invested capital each year, which is still very good, it's very low, especially if we compare it with traditional banks that charge you like Santander, BBVA with their strange investment products, with their interest rates, they charge you 1.5, 2% of your invested capital each year. Here we are talking about 0.2 or 0.07, so there is no comparison. But between these two options, which is more cost-effective or what should you do? Is the currency hedged or not? Well, on the one hand, here we already have the difference in commissions, which in reality is not that much. Look, if which in reality is not that much. Look, if I do the difference 0.20 - 0.07, it's a 0.13% extra commission that you're paying if you want to hedge the currency. Therefore, if we were to invest in an SP500 for the long term, we would obtain an average return of 8% per year. Those are the average statistics. On the other hand, if we want it covered, then it would be 7.87. I 'm subtracting that 0.13% difference. And that's not so much. I mean, in the end, over 20 years it means the difference between getting, let me calculate it for you, 160%, which would be 8 for 20 years, or getting 7.87 for 20 years, or 157%. That is, you would lose 3% of your return over 20 years. Look, it's not that much. I don't consider it a big deal if it gives you peace of mind knowing you have currency risk covered. But what we need to look at now are precisely the charts of an SP500 and the dollar against the euro to see how they fluctuate. against the euro to see how they fluctuate. This is the chart of the S&P 500 from 1980 to 2026. We can clearly see that it has an upward trend; you can see how the chart keeps going up. On the other hand, if we look at the chart of the dollar against the euro also since 1980, we can clearly see a up, that the dollar is always getting stronger against the euro or vice versa, that the euro is always getting stronger against the dollar, but rather that it's moving sideways. In fact, right now in 2026 the dollar against the euro is at 0.85 0.86, which is the same value we could 0.86, which is the same value we could see in 2020 and also in 2017 see in 2020 and also in 2017 and also in 2014 and in 2003 and so on, etcetera, etcetera. Even in 1980, the dollar-to-euro exchange rate was roughly the same as it is now in 2026. Therefore, if you're going to invest long-term, for 20 or 30 years, you need an equity product like the S&P 500 MSCW, which clearly has an upward trend and therefore won't affect you. You don't need to hedge against currency fluctuations because for many years the exchange rate will remain stable, and while it compared to how much this will change your long-term returns. Look, if I take a ruler and you take a few years, for example, since a few years, for example, since 2008, well of course, your investment has increased by 800% . Whereas if we do the same with the euro against the dollar, if I go back to 2008 for example, it might change by, say, 20% over those years, but if you had started further back , for example, if you started the euro against the dollar wouldn't have affected you at all. Therefore, if you want to be extra safe and don't mind paying a little more in fees, then you can hedge the currency, but if it's for the long term it's not necessary and in fact the biggest investors don't usually do it for the long term. Now , if you're not going to invest long-term, or if you are but with a portion in fixed income, it's in fixed income where it makes sense to hedge the currency, the risk of the dollar against the euro. To use the simplest example , 3 years for a specific goal, you might have started right away specific goal, you might have started right away and look how your return has fallen by 17%, which reduces your fixed income return , which might be around 2, 3, or 4% per year. If you do this for 3 years and the dollar has fallen 17% against the euro, then your investment will be ruined. What's more, you'd even be in the red. Or as I was saying, you can also be investing long-term, but with 90% equities and 10% fixed income, which is very common and perfectly understandable. So, as I was saying, you can have equities, index funds or ETFs like the SP500, MSC World and not have currency hedging, but in even if you are focusing on the long term, there you do hedge the currency. And I'm going to give you some examples. Look, one of the platforms I use most is Indexa Capital with a Rob Advisor where they create the portfolios for you. And in my case I have portfolio number 10, so I have 100% shares of stock index funds , equities and I have 0% fixed income, but if you had for whatever reason a slightly more conservative portfolio and not the most aggressive one which is going for the long term, I don't care if the market falls, etc., but if you had a portfolio, for example, 8 or 9, then you would have 90% equities and 10% fixed income. And notice how the word "hedged" doesn't appear in the equity section of these funds because they are not hedged, although obviously I am exposed to dollars. For example, in the Vanguard US500, which are US stocks, obviously in the end those stocks are in dollars and well, I don't have the currency hedged, but it's okay , it's long term and what I just explained is OK. On the other hand, if we go to the fixed income section, you have to have ETFs or in this case index funds, which since I'm from Spain is a bit better, index funds for tax reasons, okay? But note that in this fixed income we have different index funds of European corporate bonds. There's no need for HGE coverage here, it doesn't need to be covered because they are European companies, they are already in euros, there is no currency risk, therefore there is nothing to cover. When I invest in index funds of European government bonds , it's the same. European companies, European governments, it's in euros, there's nothing to cover. The same applies to European inflation-linked bonds . However, when investing in . However, when investing in bond index funds, that is, fixed income from US governments or companies , then I do have exposure to dollars, but I don't want it. Therefore, the currency is hedged and therefore it says Hedght, do you see that both here and here it says HCH? This way I 'm not exposed to currency risk and it's okay because it's fixed income, even though I'm focusing on the long term. I hope this video has cleared up any doubts you had about when to hedge your currency and when not to. If this video has helped you , then smash that like button, and if you have any questions, leave them in the comments and I'll answer as many as I can. Thank you very much and see you in the next videos. M.