Among developed markets single-country exchange traded funds, the iShares MSCI Australia ETF (NYSEArca: EWA) has been a solid performer this year with a gain of almost 9%. Rebounding commodities prices and an accomodative central bank are boosting Australian equities, EWA and helping the country continue its lengthy streak of not falling into a recession.

The Australian dollar could be increasingly vulnerable as the monetary policies of the Fed and the Reserve Bank of Australia continue diverging. RBA recently cut Australia’s benchmark interest rates to a record low. However, EWA, which is not a currency hedged ETF, has performed well in the face of RBA rate cuts.

Australia’s benchmark interest rate of 1.75 percent is a record low for the country, but well above most other developed markets, indicating there is room for further downside.

Related: Aussie Dollar ETF Plunges as Reserve Bank Cuts Rates

The looser monetary policy could support the economy but weigh on the AUD. Consequently, investors may track the markets through currency-hedged ETFs that try to mitigate the negative effects of a weakening Aussie, including the iShares Currency Hedged MSCI Australia ETF (NYSEArca: HAUD) and Deutsche X-trackers MSCI Australia Hedged Equity ETF (NYSEArca: DBAU).

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“Since the second half of 1991, the country’s economy has weathered global recessions, stock market crashes, political turmoil, high-profile wars overseason, and much more. Yet it’s still come out smelling like a rose,” according to ETF Daily News. “Along with China, Australia’s economic growth has been unparalleled over the past two-and-a-half decades. Its secret boils down to a combination of strong natural resources and solid leadership.”

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