WisdomTree international ETF offers forex hedge

JAN 10, 2010
WisdomTree Investments Inc. last week launched an exchange-traded fund for investors who want to maintain exposure to international stocks without losing out to a rising U.S. dollar that could eat into returns. The greenback has moved mostly higher since employment data released early last month showed fewer-than-expected job losses for November. The WisdomTree International Hedged Equity Fund (HEDJ) is designed to provide exposure to equity securities in Asia, Australia and Europe, while neutralizing currency movements in these regions versus the U.S. dollar. “There are periods where the currency is working for you and against you,” said Bruce Lavine, president of WisdomTree. “This product allows you to maintain equity exposure when the currency is against you.” Many industry experts, however, think that it will be some time before there is an extended dollar rally. “We expect to see the dollar continue to weaken throughout the year against global currencies as long as the [Federal Reserve] maintains its current policy of near-zero short-term interest rates,” Fred Dickson, senior vice president and chief market strategist at D.A. Davidson & Co., wrote last month in his 2010 outlook. Comments made separately on Sunday by Fed Chairman Ben Bernanke and Vice Chairman Donald Kohn suggested that the central bank doesn't plan to hike the overnight rate anytime soon. E-mail David Hoffman at [email protected].

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