With the Federal Reserve looking to hike interest rates and the U.S. economy continuing to strengthen, the U.S. dollar’s recent decline could be quickly pared and even push higher, potentially weakening foreign equity returns once currency fluctuations are taken into account.
DBAW devotes almost 23% of its weight to financial services stocks and a combined 22.5% to the consumer discretionary and industrial sectors.
ETF investors can also find more targeted exposure through specific options. For instance, Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSEArca: DBJP) and Deutsche X-trackers MSCI EMU Hedged Equity ETF (NYSEArca: DBEZ) provide targeted exposure to Japan and the Eurozone, respectively.
For more information on the currency hedging strategy, visit our currency-hedged ETFs category.