BlackRock expanded its suite of iShares currency hedged exchange-traded funds with the launch of the iShares Currency Hedged MSCI Emerging Markets ETF (HEEM).
The iShares Currency Hedged MSCI EMU ETF (HEZU) began trading in July.
The new funds join three additional iShares funds that launched in February 2014.
The current suite now comprises:
• iShares Currency Hedged MSCI EAFE ETF (HEFA)
• iShares Currency Hedged MSCI Germany ETF (HEWG)
• iShares Currency Hedged MSCI Japan ETF (HEWJ)
• iShares Currency Hedged MSCI EMU ETF (HEZU)
• iShares Currency Hedged MSCI Emerging Markets ETF (HEEM)
The funds are designed to reduce the impact of currency fluctuations on returns while investing in international equities. By investing in their related unhedged, parent iShares ETFs (EFA, EWG, EWJ, EZU and EEM) and implementing foreign currency forward contracts, iShares currency hedged ETFs provide a cost-effective way to mitigate unwanted currency risk.
Daniel Gamba, head of iShares Americas institutional business at BlackRock, says: “Recent events in the global economy signal an opportunity for currency hedged iShares. Central banks are diverging in monetary policies, with the ECB becoming more accommodative – weakening the Euro – while in the US a looming increase in rates strengthens the dollar. iShares currency hedged ETFs offer an efficient and cost-effective solution in a single transaction, so investors don’t have to manage complex currency hedging strategies.”