O’Shares Investments, a Boston-based investment manager and exchange-traded fund issuer, has expanded its suite of quality dividend ETFs with the launch of the currency-hedged O’Shares FTSE Europe Quality Dividend Hedged ETF (OEUH) and O’Shares FTSE Asia Pacific Quality Dividend Hedged ETF (OAPH).
O’Shares Chairman Kevin O’Leary
The new hedged products compliment two existing ETFs offering exposure to European and Asia Pacific equities by incorporating the additional benefit of mitigating international currency exposure for US dollar-based investors.
The other ETF in the suite cover large- and mid-cap dividend-paying companies in the US.
All the funds in the suite aim to allocate to companies that will, in aggregate, deliver enhanced total returns at a lower level of risk.
O’Shares Chairman Kevin O’Leary commented: “Following the successful launch of the O’Shares FTSE US Quality Dividend ETF (OUSA), it was important for my family trust to maintain the same consistent rules based investment solution on a global basis and we believe these new ETFs offer individual and institutional investors a comprehensive suite of capital efficient, transparent and cost effective index-based products that reflect these core investment principles.”
The ETFs track indices from the FTSE Global Factor Index Series which select constituents based on three factors: quality, low volatility and dividend yield. According to O’Shares, the quality and low volatility requirements are designed to potentially reduce exposure to high dividend equities that have experienced large price declines, as may occur with some dividend investing strategies.
Ron Bundy, CEO Benchmarks North America for FTSE Russell, added: “We created a multi-factor index series that intentionally captures quality, volatility and yield in a thoughtful manner and is portable across regions. We could not be more pleased to continue working with O’Shares on their next round of ETFs that track these benchmarks.”
The availability of hedged and unhedged versions of the European and Asia Pacific funds will allow investors to tailor the currency exposure in their portfolios to meet their objectives and expectations. Unhedged strategies provide diversified currency exposure but may also generate lower returns when international currencies weaken. Fully hedged strategies mitigate this risk but also constitute an implicit call on the continued strength of the US dollar. An investor could for example allocate to both, creating a neutral strategy which smooths the effects of international currency movements without taking a definitive stance on the direction of the US dollar.
“Offering both a hedged and unhedged index for the international strategies provides tools for investors with different outlooks on currency movements or different risk tolerances, to capture the multi-factor strategy in a way that’s best aligned with their individual or institutional mandates,” continued O’Leary.
The full O’Shares suite includes:
O’Shares FTSE US Quality Dividend ETF (OUSA)
O’Shares FTSE Europe Quality Dividend ETF (OEUR)
O’Shares FTSE Europe Quality Dividend Hedged ETF (OEUH)
O’Shares FTSE Asia Pacific Quality Dividend ETF (OASI)
O’Shares FTSE Asia Pacific Quality Dividend Hedged ETF (OAPH)
The fund are listed on the NYSE Arca.