One of the best performing strategies year-to-date has been the db X-trackers MSCI Japan Hedged Equity Fund (NYSEArca: DBJP). which has attracted about $109.7 million in assets and gained 22.4% year-to-date. The provider offers a suite of currency hedged country-specific ETF plays, including the recently launched db X-trackers MSCI Germany Hedged Equity Fund (NYSEArca: DBGR). [Deutsche Bank to Launch Euro-Hedged ETF for Germany]
“The hedged equity strategies protect investors from the movements between currencies by mitigating the foreign exchange risk,” Kremenstein, added. “This can reduce volatility in the portfolio and allow investors to position themselves for changing trends in the market. With the potential for the dollar to rise in value against the JPY, EUR, GBP, CHF and EM currencies over the coming years, using a hedge product, either in whole or in part makes a lot of sense.”
Meanwhile, the sponsor has enjoyed the PowerShares distribution arm to market futures-based ETNs.
“These strategies focus on market exposures that can be accessed using futures contracts, notably in the commodities space,” Kremenstein said. “The products structured as ETNs were those strategies that fit best in that wrapper, notably the leveraged and inverse products. PowerShares will provide the best platform for some futures based exchange traded products currently in the pipeline.”
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Max Chen contributed to this article.