Unlike the O’Shares FTSE Europe Quality Dividend ETF (NYSEArca: OEUR), which tracks the FTSE Europe Qual / Vol / Yield Factor 5% Capped Index, OEUH hedges against fluctuations in the relative value of foreign currencies denominated against the USD.
“It is designed to have higher returns than an equivalent fund that does not hedge against a weakening of such foreign currencies relative to the U.S. dollar,” according to O’Shares. “Conversely, the O’Shares FTSE Europe Quality Dividend Hedged ETF would be expected to have lower returns than an equivalent unhedged fund when these foreign currencies are rising in value relative to the U.S. dollar.”
OEUH country weights include U.K. 43.1%, Switzerland 19.6%, France 12.9%, Germany 6.2%, Sweden 5.0%, Netherlands 4.6%, Spain 3.2% and other 5.4%.
Sector tilts include health care 19.4%, consumer goods 19.3%, oil & gas 11.4%, telecom 11.4%, financials 10.4%, industrials 8.2%, consumer services 8.1%, utilities 7.5%, basic materials 3.5% and tech 0.8%.
Top holdings include Novartis 5.1%, Nestle 5.0%, Roche Holdings 4.9%, Vodafone Group 4.6% and British American Tobacco 4.4%.
Both OAPH and OEUH come with a 0.68% expense ratio, or 10 basis points more than the unhedged OASI and OEUR.
For more information on new fund products, visit our new ETFs category.
Money managers who are looking into constructing their own ETFs may also be interested in attending the second annual ETF Boot Camp in New York next month. Whether you’re an ETF start-up, fund company, broker dealer, pension plan, endowment, private equity firm, fund board independent director, 401k plan provider or ETF industry executive…this conference is designed for you. This one-of-a-kind event will condense everything you need to know about the inner workings of the ETF business into two days.
Max Chen contributed to this article.