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By DailyAlts Staff To hedge or not to hedge? Historically, the answer to that question has been a binary outcome for most U.S. retail investors seeking exposure to non-U.S. stocks – either fully hedged or not hedged at all. But on July 22, IndexIQ announced the launch of three new 50% currency-hedged ETFs, the first of their kind: IQ 50 Percent Hedged FTSE International ETF (NYSEARCA: HFXI ), IQ 50 Percent Hedged FTSE Europe ETF (NYSEARCA: HFXE ), and IQ 50 Percent Hedged FTSE Japan ETF (NYSEARCA: HFXJ ). Each of the new ETFs offer investors exposure to the selected universe of equities – international, Europe, or Japan – without making a binary directional bet on the U.S. dollar. “Our research has shown that 50% hedged portfolios have the potential to capture up to 80% of the risk reduction benefits of a fully hedged approach, while potentially securing steadier performance, regardless of exchange rate fluctuations,” said IndexIQ CEO and co-founder Adam Patti, in a recent statement. “With the launch of these new funds, investors can now easily add tax-efficient, neutral positioning at the core of their international equity portfolios that is neither actively bullish nor bearish on the direction of the U.S. dollar or foreign currencies.” Until the launch of these new ETFs, investors had been faced with choosing between unhedged (0%) and hedged (100%) exposure to foreign equities. Unhedged exposure could include direct ownership of foreign stocks or foreign stocks held in unhedged ETFs, and amounts to a bearish bet on the U.S. dollar. Hedged exposure, which can be gained through 100% hedged ETF products or through direct ownership of foreign stocks paired with a short currency position, amounts to a bullish bet on the dollar. But IndexIQ’s 50% hedged products effectively help investors hedge the hedging decision. Each of the new ETFs is designed to track a 50% currency-hedged index designed and maintained by FTSE: IQ 50 Percent Hedged FTSE International ETF (HFXI) seeks to track the FTSE Developed ex-North America 50% Hedged to USD Index, which is made up primarily of large- and mid-cap companies in Europe, Australasia and the Far East, IQ 50 Percent Hedged FTSE Europe ETF (HFXE) seeks to track the TSE Developed Europe 50% Hedged to USD Index, which is made up of stocks from 17 developed European countries, and IQ 50 Percent Hedged FTSE Japan ETF (HFXJ) seeks to track the FTSE Japan 50% Hedged to USD Index, which is made up of Japanese equities. “In recent years, currency has become an increasingly important factor in global equity portfolios and our clients are asking for currency hedged benchmarks that go beyond the 100% hedge ratio available today,” said FTSE Russell’s Ron Bundy, the firm’s head of North American benchmarks. “The FTSE 50% Hedged Index Series is designed to assist our clients in gaining a more complete understanding of the impact of currency on their international equity portfolios and we are excited that IndexIQ has chosen FTSE Russell as they offer 50% currency hedged ETFs to their clients.” For more information, visit the Currency Hedged Equity page at indexiq.com . Share this article with a colleague Scalper1 News
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