“The Underlying Index is designed to have higher returns than an equivalent unhedged investment when the component currencies are weakening relative to the U.S. dollar,” according to the filings.
However, if the U.S. dollar depreciates or foreign currencies start strengthening against the USD, these currency-hedged ETFs may underperform non-hedged ETFs.
“Conversely, the Underlying Index is designed to have lower returns than an equivalent unhedged investment when the component currencies are rising relative to the U.S. dollar,” according to the filings.
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.