New IndexIQ ETFs Split Foreign Currency Exposure in Half

Investors confused as to whether or not they should hedge the currency exposure on their foreign stocks now have a solution. IndexIQ is launching a trio of ETFs that split the difference, said the fund provider’s CEO Adam Patti. “We’ve found that the 50% hedged solution is the optimal solution because it provides 80% of your volatility reduction of the fully hedged solution and more consistent returns over time,” said Patti. IndexIQ, which is a subsidiary of New York Life Company and works in partnership with its MainStay brand, today announced the launch of three new ETFs: IQ 50 Percent Hedged FTSE International ETF (NYSE Arca: HFXI), IQ 50 Percent Hedged FTSE Europe ETF (NYSE Arca: HFXE), and IQ 50 Percent Hedged FTSE Japan ETF (NYSE Arca: HFXJ). Prior to this launch, investors were generally left with two choices in getting exposure to international equity ETFs, either go 100% currency hedged or completely unhedged. Both options require investors to make an implicit call on the future direction of the U.S. dollar versus foreign currencies.