Im looking into setting up retirement funds thru US equity funds. Im just curious on the general outlook/projections on the USD v PHP exchange rate 40 or so years down the line, at the time when we’ll be withdrawing from the fund and exchanging it back to PHP for use.
It depends on whether you have a positive outlook on USD or not. It's the same as asking yourself whether you have a positive outlook on the US or world market. Personally, I didn't think about the exchange rates much. I don't know what will happen in the future; my salary's denomination may even switch to a different currency in the future for all I know.
Ideally, you should be rebalancing your portfolio as you age. The older you get, the more % should be alloted to less risky investments (MP2, bonds, T-bills, TDs).
It's better for Filipinos to go for Irish-domiciled index funds instead of US-domiciled ones bec of tax implications. Better also if it's an accumulating ETF if you're going for long-term (more than 10 years).
@nickoala Can’t speak from experience coz I invested my already-USD-denominated savings into USD UITFs. In any case, it’s hard to make market predictions on forex so far down the line because so much can change, but at least on the fundamental theory level here — if exchange rates decline to PHP’s disadvantage, inflation is higher, and vice versa. So in the long run, at least IMO, it’ll even out or at least medyo negligible siya on top of the usual investment risks you’re taking on already anyway.
