Currency-hedged exchange traded funds have been among this year's most prolific asset gatherers. Three such funds are among the top 10 asset-gathering ETFs this year. The Deutsche X-trackers MSCI EAFE Hedged Equity ETF (NYSE:DBEF) is one of those funds.
In fact, only one ETF has added more new assets this year than the nearly $12.9 billion added by DBEF. Among other offerings, this ETF has helped cement Deutsche Asset & Wealth Management's (Deutsche AWM) status as a leading issuer of currency hedged ETFs and the firm is bolstering that status with the debut of six new currency hedged funds.
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Deutsche AWM adds its second yen hedged ETF with the debut of the Deutsche X-trackers Japan JPX-Nikkei 400 Hedged Equity ETF (NYSE: JPNH). JPNH is the currency hedged answer to the Deutsche X-trackers Japan JPX-Nikkei 400 Equity ETF (NYSE: JPN), which debuted in late June.
JPN and JPNH track the JPX-Nikkei 400 Index, a benchmark that gives investors a fundamental approach to stocks in Asia's second-largest economy.
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That index was launched in January 2014 as means of revitalizing the Japanese equity market.
"The JPX-Nikkei 400 Index employs a rigorous screening process based on return on equity, cumulative operating profit and market capitalization to select high-quality, capital-efficient Japanese companies, according to a statement issued by Deutsche AWM.
The $1.39 billion Deutsche X-trackers MSCI Japan Hedged Equity ETF (NYSE:DBJP) is Deutsche AWM's other Japan offering. That fund is one of the largest U.S.-listed Japan ETFs.
One of the more intriguing new offerings from Deutsche AWM is the Deutsche X-trackers MSCI Southern Europe Hedged Equity ETF (NYSE: DBSE). While ETFs tracking the so-called PIIGS nations have received ample attention in recent years, there is not a dedicated multi-country ETF for this motley crew.
The Deutsche X-trackers MSCI Southern Europe Hedged Equity ETF comes close as that new fund is a dedicated Italy/Portugal/Spain play. In reality, the new ETF is mostly Spain and Italy as those two countries, which are the largest Eurozone economies after Germany and France, combine for over 95 percent of the new ETF's weight.
Speaking of Italy and Spain, Deutsche AWM introduced the Deutsche X-trackers MSCI Italy Hedged Equity ETF (NYSE: DBIT) and the Deutsche X-trackers MSCI Spain Hedged Equity ETF (NYSE: DBSP). Those funds add to Deutsche AWM's lineup of Europe currency hedged single-country ETFs, which includes the increasingly popular Deutsche X-trackers MSCI Germany Hedged Equity ETF (NYSE:DBGR).
Due to the divergent monetary policies throughout the developed world, which have been prompted by the Bank of Japan and the European Central Bank easing at a time when many expect the Federal Reserve to tighten, it can be said that all of Deutsche AWM's new launches are well-timed.
However, the Deutsche X-trackers MSCI Australia Hedged Equity ETF (NYSE: DBAU) is extremely well-timed as the Reserve Bank of Australia has been on a scorched earth campaign to weaken the Aussie in a bid to bolster non-mining sectors of the world's 12th-largest economy. Why could DBAU be a star? The CurrencyShares Australian Dollar ETF (NYSE:FXA) has plunged 10 percent this year.
The Deutsche X-trackers MSCI EAFE Small Cap Hedged Equity ETF (NYSE: DBES) is Deutsche's other new offering. That new ETF tracks the MSCI EAFE Small Cap U.S. Dollar Hedged Index, making it the small-cap complement to the aforementioned DBEF.
With Wednesday's launches, Deutsche AWM now offers 17 currency hedged ETFs, the largest such lineup among ETF sponsors in the U.S., according to a statement.
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