DBEF tracks the MSCI EAFE US Dollar Hedged Index, the hedged equivalent of the well-known MSCI EAFE Index. With 22.4% of its weight allocated to Japanese stocks and 26% devoted to Eurozone nations, DBEF stands out as a valid option for advisors looking to exploit the strong dollar as well as BOJ and ECB easing efforts.
The currency hedge difference has been on full display this year as DBEF has jumped 5% while the unhedged MSCI EAFE Index is lower by 4.7%. That scenario helps explain DBEF’s exponential growth. DBEF entered 2014 with about $313 million in assets under management. Today, the ETF has over $1.2 billion in assets under management. [Falling Currencies Lift This ETF]
DBEF has not just doubled in size this year, its AUM total has more than quadrupled as investors have rushed to exploit a strong dollar and tumbling developed market currencies while maintaining equity exposure.
Over the 10 years ending in the second quarter of 2014, the hedged equivalents of the MSCI EAFE Index were less volatile than their unhedged counterpart while sporting a higher Sharpe Ratio, according to Deutsche Asset & Wealth Management data.
Financial advisors who are interested in learning more about DBEF and the advantages of currency hedged ETFs can register for the Thursday Dec. 1 webcast here.