Refining its currency-hedged exchange traded fund suite, WisdomTree is working on a smart-beta currency adjustment strategy that could minimize losses and maximize gains as foreign currencies fluctuate.
Wisdomtree has filed with Securities and Exchange Commission for four separate “Dynamic” currency-hedged ETFs, including:
- WisdomTree Dynamic Currency Hedged Europe Equity Fund
- WisdomTree Dynamic Currency Hedged Japan Equity Fund
- WisdomTree Dynamic Currency Hedged International Equity Fund
- WisdomTree Dynamic Currency Hedged International SmallCap Equity Fund
No tickers or expense ratios were listed.
The four proposed currency-hedged ETFs will provide exposure to foreign equities while hedging against currency exposure to fluctuations between the foreign currencies and the U.S. dollar. [4 Things You Need To Know About Currency Hedging]
When investing in overseas assets, investors are exposed to currency risks. If the foreign currency-denominated security depreciates against the U.S. dollar, U.S. investors will see a lower U.S.-denominated return. However, a currency-hedged position may underperform a non-hedged investment if the foreign currency appreciates against the USD. [Critical Currency Consideration]
Consequently, WisdomTree is working on a group of so-called Dynamic currency-hedged ETFs that could help minimize losses when foreign currencies weaken and maximize gains when the foreign currencies strengthen.