4 Factors to Consider When Currency Hedging

Furthermore, it would be wise for investors to also filter out the noise regarding trade wars or other negative news.

“If you follow the news slavishly, you’re actually going to end up hiding under your bed instead of allocating internationally,” said Bush.

Investors can take advantage of DWS Products with currency hedging built in to allay any fears of investing internationally. Click here for a list of DWS Group’s 12 ETF offerings that feature currency hedging.

Interest Rate Hedging Options

In addition to currency hedging products, the latest rate hike by the Federal Reserve makes the case for investors to consider the Xtrackers Investment Grade Bond Interest Rate Hedged ETF (BATS: IGIH). IGIH seeks investment results that track the performance of the Solactive Investment Grade Bond – Interest Rate Hedged Index where a portion IGIH’s total assets will reside in long positions in U.S. dollar-denominated investment-grade corporate bonds. As in the case of IGHG, this strategy effectively eliminates exposure to riskier bonds with fund allocations in investment-grade issues.

Another option is the Xtrackers High Yield Corporate Bond Interest Rate Hedged ETF (BATS: HYIH)
HYIH seeks investment results that correspond generally to the performance of the Solactive High Yield Corporate Bond-Interest Rate Hedged Index–more high yield to appease Axelrod’s appetite for risk. HYIH will invest at least 80% of its total assetsin instruments that comprise the underlying index, such as long positions in U.S. dollar-denominated high yield corporate bonds and shorts in U.S. Treasury notes or bonds of approximate equivalent duration to the high yield bonds.

To learn more about currency hedging or other DWS products, visit the DWS website.

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