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Deutsche X-trackers MSCI EAFE Hedged Equity ETF (DBEF)

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  • Tue, Apr. 14, 3:18 PM
    • While many investors cite volatility reduction as a rationale for currency hedging, a white paper from GMO's Catherine LeGraw argues: 1) Volatility may be cut over the short-term, but not over longer horizons; 2) Volatility benefits have been reduced over time as companies become more global; 3) Even if volatility is lowered for international holdings, it isn't reduced for the whole portfolio as the hedging simply makes holdings more correlated with U.S. stocks; 4) Hedging introduces leverage and hence tail risk (see the move in the Swiss franc).
    • WisdomTree (WETF -2.6%) has ridden a couple of star currency-hedged funds - DXJ and HEDJ to big profits.
    • There's also Deutsche's DBEF, and not surprisingly a bunch more have recently come to market like [[DBRE}} and DBIF. BlackRock this week filed for 11 new currency-hedged ETFs.
    • LeGraw: "Currency management is a useful tool when done for the right reasons: because of a high-conviction view, or a desire to mitigate an identified risk exposure. We caution that a simple currency hedging strategy may not achieve these objectives.”
    | 7 Comments
  • Aug. 8, 2011, 8:22 AM
    Royal Dutch Shell (RDS.A) receives an upgrade from Oppenheimer to Outperform from Market Perform with a price target of $80. The firm sees the Big Oil player realizing a nice earnings and cash flow boost following its $60B investment in projects over the last 5 years. Shares -2.6% premarket, in-line with other oil majors.
    | Comment!
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DBEF Description
The db X-trackers MSCI EAFE Hedged Equity Fund (the "Fund") seeks investment results that correspond generally to the performance, before fees and expenses, of the MSCI EAFE US Dollar Hedged Index (the "Index"). The Index is designed to provide exposure to equity securities in developed international stock markets, while at the same time mitigating exposure to fluctuations between the value of the U.S. dollar and non-U.S. currencies. As of March 31, 2011, the Index includes securities from the following 22 countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland and the United Kingdom.
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