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April 13, 2015


iShares Plans Hedged ETFs

A recent flurry of filings from iShares for 11 currency-hedged funds that will invest in existing iShares ETFs indicates the world’s largest ETF provider has a laserlike focus on the rapidly expanding currency-hedged ETF space.


iShares currently trails firms like WisdomTree and Deutsche Bank in terms of the number of currency-hedged ETFs it sponsors and the assets invested in them. Nevertheless, the firm’s currency-hedged lineup is nothing to sneeze at; it has some $5.5 billion invested in the five currency-hedged equity funds that it does offer.


iShares is in a unique position not shared by either of its two competitors in the currency-hedged space in that it has a wide array of existing traditional cap-weighted regional and single-country equity ETFs that are already up and running. That means its new currency-hedged versions of those funds can invest in the pre-existing unhedged ETFs and simply add the hedging strategy.


In other words, these funds are likely to have instant liquidity based on the pre-existing and well-established securities despite its slow start. That means that the world’s largest ETF company is likely to become a major competitor in the currency-hedged arena.


The 11 proposed currency-hedged funds, including three regional ETFs and eight single-country ETFs, and their corresponding cap-weighted iShares ETFs, are as follows:


The filings did not include tickers or expense ratios. 



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