“It’s appropriate – and I’ve said this in the past – for the Fed to gradually and cautiously increase our overnight interest rate over time,” Yellen said Friday. “Probably in the coming months such a move would be appropriate.”

Related: International ETFs: Currency Story Hasn’t Changed

If the Fed hikes rates, the exchange value of the U.S. dollar will strengthen, or foreign currencies will depreciate relative to the greenback. Consequently, a non-hedged international investment will experience lower U.S. dollar-denominated returns.

Investors can capture European market returns while hedging against the foreign exchange risks through a number of hedged-equity ETFs.


Europe currency-hedged equity ETFs:

  • WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ)
  • Deutsche X-Trackers MSCI Europe Hedged Equity ETF (NYSEArca: DBEU)
  • iShares Currency Hedged MSCI EMU ETF (NYSEArca: HEZU)
  • PowerShares Europe Currency Hedged Low Volatility Portfolio (NYSEArca: FXEU)
  • WisdomTree Europe Hedged SmallCap Equity Fund (NYSEArca: EUSC)
  • Deutsche X-trackers MSCI EMU Hedged Equity ETF (NYSEArca: DBEZ)
  • IQ 50 Percent Hedged FTSE Europe ETF (NYSEArca: HFXE)
  • First Trust RiverFront Dynamic Europe ETF (NasdaqGM: RFEU)
  • JPMorgan Diversified Return Europe Currency Hedged Equity ETF (NYSEArca: JPEH)
  • SPDR EURO STOXX 50 Currency Hedged ETF (NYSEArca: HFEZ)
  • ProShares Hedged FTSE Europe ETF (NYSEArca: HGEU)
  • O’Shares FTSE Europe Quality Dividend Hedged ETF (NYSEArca: OEUH)
  • WisdomTree Dynamic Currency Hedged Europe Equity Fund (BATS: DDEZ)
  • iShares Edge MSCI Min Vol Europe Currency Hedged ETF (BATS: HEUV)
  • Deutsche X-trackers MSCI Eurozone High Dividend Yield Hedged Equity ETF (NYSEArca: HDEZ)
  • iShares Adaptive Currency Hedged MSCI Eurozone ETF (BATS: DEZU)

For more information on hedged options, visit our currency hedged ETFs category.

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