DBES targets the MSCI EAFE Small-Cap U.S. Dollar Hedged Index, which focuses on smaller companies in developed markets of Europe, Australasia and the Far East. DBES is the small-cap counterpart to the popular Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSEArca: DBEF).
DBES, which celebrates its second anniversary in a few days, holds nearly 970 stocks. The hedged ETF would outperform similar non-hedged strategies if foreign currencies depreciate against the greenback. DBES allocates nearly 39% of its combined weight to industrial and consumer discretionary stocks. Financial services, technology and real estate names combine for nearly a third of the ETF’s roster.
Like many MSCI EAFE strategies, DBES is heavy on Japanese and British stocks as those regions combine for almost 48% of the ETF’s weight. The Japan exposure is benefiting DBEF this year as that country is home to some of the world’s best-performing small-caps.
DBES charges 0.45% per year, or $45 on a $10,000 investment.
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