Each week, ETF Trends publisher Tom Lydon sits down for “ETF of the Week” for MarketWatch on Chuck Jaffe’s MoneyLife Show where he highlights big movers and losers among exchange traded funds.
This week, Lydon looked at the Deutsche X-trackers MSCI Japan Hedged Equity ETF (DBJP).
The strengthening dollar and weakening yen has painted a rosier picture for export-oriented Japanese economy.
DBJP’s currency-hedged component uses forward currency swaps to mitigate currency risks. A weakening yen would typically weigh on Japanese stock investments once converted back to a stronger dollar.
This means the currency-hedged ETF would outperform a non-hedged fund if the underlying currency continues to depreciate.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.