Investors who are looking into international stocks should be wary of the potential negative effects of a strengthening U.S. dollar on their investments and may consider currency-hedged ETF strategies to limit the foreign exchange risks.
“We really want people to think about this strategically and long-term that being hedged makes a lot of sense,” Luke Oliver, Managing Director and Head of Capital Markets for DWS, said at the 2018 Morningstar Investment Conference.
DWS has maintained a belief that the U.S. dollar could strengthen based on their call that interest rates will rise as the U.S. Federal Reserve tightens its monetary policy and weaker data out of foreign markets that suggest possible easing or at the very least not tightening.