Advantage Hedged Currency ETFs

January 17th at 7:30am by Max Chen

Exchange traded funds allow investors to branch into overseas markets, but with foreign exposure, investors are subject to currency risks. However, a new breed of currency-hedged equity funds are gaining popularity as a way to mitigate Forex fluctuations.

ETF Trends’ Tom Lydon recently sat down with Luciano Siracusano, Chief Investment Strategist at WisdomTree, to discuss the currency-hedged ETF strategies and how the investments help manage foreign risks.

“International investing is a much bigger piece of what people get exposure to these days, and the currency piece of it is very important,” Siracusano said. “We looked around the world and said, ‘Is there interest in hedging out the impact of currency on the international equity exposure.’ And there was a lot of client interest.”

When investing in foreign equities, investors are exposed to currency risks. Specifically, if the foreign currency-denominated security sees the local currency depreciate against the U.S. dollar, investment returns may be lower after exchanging the weaker foreign currency for U.S. dollars.

Watch the video below to see the full interview with Luciano Siracusano.

To view past video interviews, visit our video section.

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