However, potential investors should keep in mind that these currency-hedged ETFs may underperform non-hedged strategies when a foreign currency appreciates against the U.S. dollar, so the investment strategy is not without its risks.
For now, the currency-hedged U.K. ETFs may continue to outperform their non-hedged counterpart, especially with the Bank of England now supporting more aggressive monetary policies and accommodative measures to support the economy in a post-Brexit environment, which will put further pressure on the British pound.
Last week, the Brexit spurred the BOE’s first interest-rate cut in seven years and pushed officials to raise their gilt-purchase program by 60 billion pounds, or $78 billion, to 435 billion pounds and extended the program to included corporate debt.
SEE MORE: Measuring the Pulse of the U.S. Economy
Investors and market watchers are also keeping an eye on the government to implement any fiscal stimulus measures as well.
Moreover, a weakening GBP will continue to benefit British exporters and the large-cap segment, which has been reflected in the rebound in the FTSE 100.
For more information on Currency ETFs, visit our Currency category.