The SPDR EURO STOXX 50 Currency Hedged ETF (HFEZ) – the company’s first currency hedged ETF – has begun trading on the NYSE Arca.
HFEZ provides investors with an opportunity to benefit from the growth potential of large-cap Eurozone stocks while seeking to minimise exposure to fluctuations in the euro to US dollar exchange rate. HFEZ complements the SPDR EURO STOXX 50 ETF (FEZ), which currently has USD4.9 billion in assets under management.
“Investors are reexamining their exposure to Europe in response to changing market dynamics and are looking for ways to address decoupling of US and European monetary policy which has led to depreciation of the euro versus the dollar,” says James Ross, executive vice president and global head of SPDR Exchange Traded Funds at SSGA. “Investors have asked us to launch a hedged exposure to complement their holdings in FEZ. HFEZ can provide European equity exposure while seeking to mitigate the volatility caused by currency movements. We believe the EURO STOXX 50 index, a core European equity index that offers exposure to 50 highly traded stocks from 12 countries, is an effective way for investors to access Eurozone equities, especially as headline risks remain present.”
The SPDR EURO STOXX 50 Currency Hedged ETF seeks to track the performance of the EURO STOXX 50 Hedged USD Index. This Index was developed for investors seeking exposure to the EURO STOXX 50 Index, which includes 50 liquid Eurozone stocks from 12 countries, while looking to reduce the risk of currency fluctuations. The SPDR EURO STOXX 50 Currency Hedged ETF has a net expense ratio of .32 per cent and a gross expense ratio of 0.61 per cent.
“European equities are attractive in light of recent accommodative monetary policy and improving economic activity,” says Michael Arone, chief investment strategist for the US Intermediary Business at SSGA. “An allocation that is divided between hedged and unhedged exposures may help investors and advisors reduce the risk of future currency fluctuations, which is why we see HFEZ as a natural complement to our popular SPDR EURO STOXX 50 ETF (FEZ).”