An ETF That Hedges Against Currency Swings

With the dollar climbing, Deutsche X-trackers MSCI EAFE Hedged Equity rises to the top.

Although foreign stocks are important for diversifying your portfolio, currency swings can affect their performance. For instance, Americans who invest in Japanese shares when the dollar is weakening relative to the yen will see a boost in returns because investments in yen get translated into more greenbacks. But when the dollar is strengthening, as it has been recently, U.S.–based investors are likely to see their returns diminish. They may think it’s time to get out of Dodge (or Toyota, as it were).

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Ryan Ermey
Former Associate Editor, Kiplinger's Personal Finance

Ryan joined Kiplinger in the fall of 2013. He wrote and fact-checked stories that appeared in Kiplinger's Personal Finance magazine and on Kiplinger.com. He previously interned for the CBS Evening News investigative team and worked as a copy editor and features columnist at the GW Hatchet. He holds a BA in English and creative writing from George Washington University.