ETF investors who are still bullish on the European markets can take on currency hedged-equity plays. ETFs with foreign exposure typically hold domestic currency denominated stocks, so a depreciating foreign currency would mean the stocks are worth less U.S. dollars. Currency hedged equity ETFs typically outperform similar non-currency hedged equity funds when the underlying currency is weakening against the U.S. dollar.
With the WisdomTree Europe Hedged Equity Fund (HEDJ) and the db X-trackers MSCI Europe Hedged Equity Fund (DBEU), investors can gain exposure to Eurozone equities while hedging against the negative effects of a depreciating euro currency. Both ETFs are trading lower today with HEDJ down almost 0.6% on volume that is more than double the daily average. [WisdomTree Plans Currency Hedged International Dividend ETF Play]
Additionally, the db X-trackers MSCI Germany Hedged Equity Fund (DBGR) and WisdomTree Germany Hedged Equity Fund (DXGE) provide currency hedged equity exposure to German stocks.
SPDR EURO STOXX 50 ETF
For more information on Eurozone, visit our Europe category.
Max Chen contributed to this article.