Meanwhile, with the European Central Bank adhering to a loose monetary policy, the euro currency is more at risk of depreciating against the U.S. dollar. Consequently, investors who are bullish on the Eurozone economy may be up against a bearish euro currency outlook – foreign investment returns are usually denominated in their local currency, so a weakening euro currency translates to lower U.S. dollar-denominated returns. [Investors Piled Into These ETFs Ahead of ECB Meeting]
Consequently, investors can consider investment strategies like the db X-Trackers MSCI Europe Hedged Equity Fund (NYSEArca: DBEU), which provides exposure to European markets while hedging against a depreciating euro. DBEU tracks 16 developed European stock markets, including Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
For more information on Europe, visit our Europe category.
Financial advisors who are interested in learning more about hedging currency risk with European equity exposure can register for the Wednesday, July 16 webcast here.