UBS unveils USD-hedged MSCI EMU ETF

Feb 17th, 2015 | By | Category: Equities

UBS Global Asset Management has listed a new ETF offering investors the opportunity to invest in equities from Eurozone countries with US dollar currency hedging.

UBS unveils USD-hedged MSCI EMU ETF

UBS has expanded is range of currency-hedged ETFs with the launch of a USD-hedged MSCI EMU ETF.

The ETF, the UBS ETF (LU) MSCI EMU hedged USD UCITS ETF (USD) A-dis (UC89), has been listed on the London Stock Exchange and is linked to the MSCI EMU 100% Hedged to USD Index.

The index represents a close estimation of the performance that can be achieved by hedging the currency exposure of its parent index, the MSCI EMU Index, to the USD, the home currency for the hedged index. The index is 100% hedged to the USD by selling the EUR forward at the one-month Forward rate.

The parent MSCI EMU Index captures large and mid cap representation across the 10 Developed Markets countries in the European Economic and Monetary Union. With 238 constituents, the index covers approximately 85% of the free float-adjusted market capitalization of the EMU. Developed market countries in the EMU include Austria, Belgium, Finland, France, Germany, Ireland, Italy, the Netherlands, Portugal and Spain.

With this ETF, investors can benefit when European equities perform well and, at the same time, benefit when the US dollar appreciates against the euro. This can provide an interesting tactical opportunity, particularly in light of the recent strong fluctuations in the currency markets.

The euro has fallen appreciably in value against the US dollar in recent months. This may allow European companies drawing up their accounts in euros and securing part of their revenues outside Europe to increase earnings. At the same time, many industry experts expect the euro to continue falling against a number of key currencies.

This latest listing further broadens UBS’s currency-hedged ETF offering, which is already the largest in Europe, with in excess of £2.5 billion in total assets under management.

The ETF is based in, and traded in, USD and comes with a total expense ratio 0.33%.

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