Pass On Currency Hedged Emerging Market ETFs

Pass On Currency Hedged Emerging Market ETFs

A Seeking Alpha Contribution

Summary

  • A U.S. dollar rally and China slowdown are hitting emerging markets, particularly commodity exporters, very hard.
  • New ETFs offer currency hedged exposure to emerging market equities.
  • However, emerging market assets prices tend to be more highly correlated with currency moves, making hedging less attractive.

A U.S. dollar rally begun in July has yet to reverse, and combined with a slowing Chinese economy, commodity exporters and emerging markets have been hit hard. New ETFs propose to limit risk by hedging emerging market currency exposure, but will they work?

First, here’s a look at some of the worst-hit country ETFs. Funds such as WisdomTree Commodity Country Equity ETF (NYSEARCA:CCXE) are at ground zero. CCXE has the following country allocations:   To Continue Reading, Please Click Here.

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