The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

FX: Wary investors still suspicious of currency-hedged ETFs

Investors continue to shy away from currency-hedged ETFs despite their positive short- and medium-term performance.


According to Bloomberg data, assets in currency-hedged exchange-traded funds had more than halved by the beginning of 2018 from their 2015 peak of $63 billion. Yet about 81% of hedged funds have outperformed their unhedged equivalents over the last 12 months, a figure that rises to 89% over a five-year time frame.


Sal Bruno,

The problem is that many investors came late to the game, and by the time they got into these funds the dollar rally had stalled. Being hedged was not a good option in 2017 as the dollar was weak relative to the US’s biggest partners.

The environment was benign during the early part of 2018, but in the second quarter the dollar began to strengthen across a range of currencies – particularly the renminbi but also the euro and the pound – on the back of US president Donald Trump’s spats over trade and tariffs.

A typical investor’s perspective would therefore be that the US currency was weak in 2017, and while it has gained ground over the last six to eight months, says IndexIQ chief investment officer Sal Bruno, it is unclear whether that rally will continue into 2019 or whether the US is coming to the end of its tightening cycle.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree