How Currency-Hedged ETFs Stack Up

By: ETFdb
With over 1,600 exchange-traded funds to choose from, investors can essentially tap into any corner of the investable universe. Perhaps one of the most popular markets has been ETFs that offer exposure to equities outside of the U.S.. Not only do these funds add great diversification benefits, but they are significantly less expensive than mutual fund options [see Sector SPDRs: How These ETFs Have Performed Since Inception]. When it comes to adding global exposure, it is important for investors to realize how currency exposure can seriously impact bottom line returns. Most international equity ETFs effectively establish a long position in the local currency and a short position in the U.S. dollar. When the value of the dollar is declining, that exposure can work in favor of U.S. investors, as exchange rate fluctuations enhance their returns. But when the dollar strengthens, the currency impact can offset gains or exacerbate losses experienced in […] Click here to read the original article on ETFdb.com. Related Posts: Least Correlated Country ETFs To S&P 500 World Cup Of ETFs: Plays On All 32 Countries Currency ETFs vs. Their Stock Market Since Market Bottom ETF Heatmap: Gauging European ETF Performance Buy On The Dip Prospects December 16th Edition
With over 1,600 exchange-traded funds to choose from, investors can essentially tap into any corner of the investable universe. Perhaps one of the most popular markets has been ETFs that offer exposure to equities outside of the U.S.. Not only do these funds add great diversification benefits, but they are significantly less expensive than mutual fund options [see Sector SPDRs: How These ETFs Have Performed Since Inception]. When it comes to adding global exposure, it is important for investors to realize how currency exposure can seriously impact bottom line returns. Most international equity ETFs effectively establish a long position in the local currency and a short position in the U.S. dollar. When the value of the dollar is declining, that exposure can work in favor of U.S. investors, as exchange rate fluctuations enhance their returns. But when the dollar strengthens, the currency impact can offset gains or exacerbate losses experienced in […]

Click here to read the original article on ETFdb.com.

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