Daily ETF Watch: ‘Dynamic’ Hedge Planned

WisdomTree files for ETFs that will adjust currency hedges based on a formula.

Reviewed by: Heather Bell
Edited by: Heather Bell

A recent filing from WisdomTree details the latest twist on the currency-hedged ETF trend. The firm is planning to launch four ETFs that will incorporate currency hedges, but will use currency-related quantitative data to adjust the hedging ratios so that losses due to currency fluctuations are minimized while gains are maximized, according to the prospectus.

An individual currency’s hedge can range from 0 to 100 percent.

The four funds are as follows:

Companies are selected and weighted within each index primarily based on their dividend payments. The international funds target developed markets, and each currency that they include is hedged separately.

The filings did not include expense ratios, tickers or the exchange on which the funds will list.

Contact Heather Bell at [email protected].

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.