# XEF.TO - Great Value or Sell? iShs Core MSCI TU



## mikeyrofl (Jul 12, 2016)

Guys XEF has dropped substaintially over the last quarter, any thoughts on whether this is good time to buy more?


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## AltaRed (Jun 8, 2009)

Most, if not all, of that is the rise of the Candaian loonie relaive to global currencies from circa 75? cents to US to 80 cents. How much more room do you think the loonie has to go?


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## mikeyrofl (Jul 12, 2016)

AltaRed said:


> Most, if not all, of that is the rise of the Candaian loonie relaive to global currencies from circa 75? cents to US to 80 cents. How much more room do you think the loonie has to go?


So rise in CAD causes a drop in price in an international equities ETF? huh? why>


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## AltaRed (Jun 8, 2009)

mikeyrofl said:


> So rise in CAD causes a drop in price in an international equities ETF? huh? why>


Because the underlying securities in XEF are price in euros, yen, and every other global currency except the USD, not loonies. IF the loonie has appreciated against those currencies, then those securities are worth less in loonies. Tht is the whole concept of diversification across currencies and regions. If, on the other hand, the loonie depreciates against the other currencies, the value of XEF goes up in CAD currency which is partly why XEF had been performing so well for a year or so.

Added: IF you don't like effects of currency on your ex-Canada holdings, then buy a currency hedged ETF instead..... so that the effects of currency are negated. But you will pay more in MER and hedging costs for such an animal. Most wise investors would never hedge currency in their holdings because presumably you hold ex-Canada securities partly for that diversification.


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