Currency Hedged EAFE ETF Continues Torrid Asset-Gathering Pace

The currency hedged advantage is continuing in 2015. Importantly, currency hedged ETFs are showing advisors and investors the advantages of muting currency risk in a strong dollar environment. DBEF is the currency hedged equivalent of the popular iShares MSCI EAFE ETF (NYSEArca: EFA). While EFA is one of the largest ETFs in the world, DBEF is cementing the notion that currency hedging works in strong dollar environments. DBEF is up 11.8% this year, an advantage of 500 basis points over the unhedged EFA. [Currency Hedged ETFs Swell in Size]

DBEF’s 919 constituents can hail from 21 countries, including the following: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.

Of DBEF’s top nine country weights, only Japan and the U.K. have yet to cut interest rates or engage in some form of currency weakening this year. Eurozone nations combine for 27.1% of DBEF’s top nine country weights. Australia, home to one 2015 rate cut and expectations for more, is 7.5% of DBEF’s weight. Sweden, which further lowered its repo rate into negative territory Wednesday, taking that rate to -0.25% from -0.1%, is almost 3.1% of DBEF’s weight.

Deutsche X-trackers MSCI EAFE Hedged Equity ETF