BlackRock, Inc. (NYSE:BLK)'s iShares unit, the world's largest issuer of exchange-traded funds, made a major splash Monday in the marriage of two hot ETF themes currency hedging and low volatility with the introduction of five such funds.
Four of the five funds are currency hedged versions of existing iShares minimum volatility ETFs, part of BlackRocks range of iShares smart beta ETFs. iShares minimum volatility ETFs are designed to help investors weather the ups and downs of the market whilst staying invested, offering the potential for lower risk and long term growth, said iShares in a statement.
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The new ETFs from iShares include:
- iShares Currency Hedged MSCI ACWI Minimum Volatility (NYSE: HACV)
- iShares Currency Hedged MSCI EAFE Minimum Volatility (NYSE: HEFV)
- iShares Currency Hedged MSCI EM Minimum Volatility ETF (NYSE: HEMV)
- iShares Currency Hedged MSCI Europe Minimum Volatility (NYSE: HEUV)
- iShares Currency Hedged MSCI Europe Small-Cap ETF (NYSE: HEUS)
Not Just NYSE; BATS Global Markets Ahead
The introduction of those ETFs is also a boon for BATS Global Markets, which has been looking to bolster the number of ETFs it lists. All five of the new iShares ETFs will trade on BATS. Last week, it was reported that two SPDR ETFs are moving to BATS and three new WisdomTree ETFs also debuted on BATS. Nearly 25 iShares ETFs trade on BATS, accounting for roughly two-thirds of the exchange's ETF listings.
Associated Unhedged Parent iShares ETFs
Each new fund holds its unhedged parent iShares ETF and implements foreign currency forwards. They may benefit from the liquidity of the underlying iShares ETFs in which they invest, whilst also seeking to reduce the impact of international currency movements relative to the U.S. dollar. U.S. investors are exposed to currency risk when investing in international markets and adverse moves in exchange rates can impact performance in U.S. dollar terms, according to iShares.
HACV holds the iShares MSCI All Country World Minimum Volatility ETF (iShares Inc. (NYSE:ACWV)), while HEFV is the currency hedged answer to the iShares MSCI EAFE Minimum Volatility ETF (NYSE:EFAV). HEMV is the currency hedged equivalent of the increasingly popular iShares MSCI Emerging Markets Minimum Volatility ETF (iShares Inc. (NYSE:EEMV)), while HEUV holds the iShares MSCI Europe Minimum Volatility ETF (iShares Trust (NYSE:EUMV)). HEUS holds the iShares MSCI Europe Small-Cap ETF (NASDAQ:IEUS).
Led by the $6.5 billion iShares MSCI USA Minimum Volatility ETF (iShares Trust (NYSE:USMV)), the iShares minimum volatility ETF suite has $15.1 billion in assets under management, according to the issuer.
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