Daily ETF Watch: SSgA Hedging Europe

March 26, 2015

State Street Global Advisors in a recent filing has outlined plans to launch its first currency-hedged ETF, bringing it into the same space as Deutsche Bank, iShares and WisdomTree.

 

The SPDR Euro Stoxx 50 Currency Hedged ETF will essentially track the same index as the SPDR Euro Stoxx 50 ETF (FEZ | A-76), but with a currency hedge overlay in the form of one-month forward-currency contracts. The prospectus specifically states that the hedged version can invest in FEZ itself in addition to the individual securities of the Euro Stoxx 50, which tracks 50 of the largest and most liquid stocks in the eurozone.

 

There are currently 30 currency-hedged ETFs listed in the U.S.

 

They have become popular as other currencies—in particular, the euro and the yen have weakened against the dollar. Currently, the largest currency-hedged ETFs by far are two offerings from WisdomTree: the now nearly $17 billion WisdomTree Europe Hedged Equity ETF (HEDJ | B-61) and the $16 billion WisdomTree Japan Hedged Equity ETF (DXJ | B-69).

 

The filing did not include an expense ratio or ticker, but it did indicate the fund will list on the NYSE Arca.

 

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