Deutsche Bank cannot be ignored in this segment either with a number of entries here, the most popular in terms of AUM being DBEU (Deutsche MSCI Europe Hedged Equity, Expense Ratio 0.45%, $1.7 billion in AUM) and DBJP (Deutsche Japan Hedged Equity, Expense Ratio 0.45%, $870 million in AUM) and several other products granting exposure to Mexico, Brazil, the U.K. and others. Innovation has certainly not slowed in this ETF category as we have seen additional products roll out to market targeting even more esoteric “niches” in the Currency Hedged Equity space like DXJT (WT Japan Hedged Tech, Media, and Telecom, Expense Ratio 0.43%), and EUSC (WT Europe Hedged SmallCap Equity, Expense Ratio 0.58%) for example.
What we are wondering in the face of a U.S. Dollar downturn, whenever that may occur, is will a) the torrid pace of inflows into such funds slow if the U.S. Dollar stops appreciating against global currencies and b) will this ultimately stifle product innovation and asset growth in the space given the fact that some ETF investors may choose to “stop currency hedging their international equity exposure” simply because the runaway U.S. Dollar bull will have run its course?
WisdomTree Europe Hedged Equity Fund
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