Two Hedged Equity ETFs for Your Portfolio
Tuesday, July 27th, 2010Michael Johnston submits:
If you were to ask most individual investors or financial advisors their take on the outlook for the Indian rupee or Swedish krona, most would probably respond with a blank stare. But most of those same investors probably maintain some degree of currency exposure in their portfolios, especially if any of the $190 billion in international equity ETFs belongs to them.
Returns on the vast majority of international equity ETFs depend not only on the performance of the securities in their local market, but on the changes in the value of the local currency relative to an investor’s home currency. The currency component of total returns is generally relatively minor compared to the equity component, but can certainly have a material impact on a security’s bottom line return.
