SSGA rolls out international currency-hedged real estate and dividend ETFs

Sep 18th, 2015 | By | Category: Alternatives / Multi-Asset

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State Street Global Advisors (SSGA), the asset manager behind the SPDR exchange-traded fund range, has announced the launch of two currency-hedged ETFs providing exposure to international income-producing asset classes: real estate and dividend-paying stocks.

SSGA rolls-out two international currency-hedged ETFs

The new ETFs provide international income exposure while mitigating currency risk against the US dollar.

The SPDR MSCI International Real Estate Currency Hedged ETF (HREX) and the SPDR S&P International Dividend Currency Hedged ETF (HDWX) track an index of real estate and high-income companies respectively, while attempting to mitigate the risk associated with fluctuations of the US dollar against international currencies.

“Recent flow trends have highlighted continued investor interest in currency-hedged ETFs to help manage currency volatility,” said James Ross, executive vice president and global head of SPDR Exchange Traded Funds at SSgA. “The search for yield continues to be a pressing need for investors and the addition of HREX and HDWX provides our clients with the ability to better manage currency risk when seeking attractive income-producing opportunities outside of the US.”

The real estate ETF aims to track the performance of the MSCI World ex USA IMI Core Real Estate Capped 100% Hedged to USD Index. This index is designed to reflect the performance of stocks engaged in the ownership, development and management of core real estate property types. To be included in the index, a company needs to derive at least 75% of its revenues from real estate related to a combination of these property types: industrial, office, retail, residential, health care, hotel and resort, storage. This methodology seeks to reflect a narrow definition of the real estate universe to more closely reflect the public market of real estate investors. It has a net expense ratio of 0.48%.

The international dividend ETF seeks to track the performance of the S&P International Dividend Opportunities USD Hedged Index and provides exposure to the 100 highest dividend-yielding companies listed in the broad international equity market. In order to be eligible for inclusion in the index, potential constituents must meet liquidity and stability criteria as measured by market capitalisation and average daily trading volumes (liquidity), and profitability and earnings growth (stability). This universe is then sorted by dividend yield with the top 100 stocks selected for inclusion in the index. It has a net expense ratio of 0.48%.

Both funds have been listed on the NYSE Arca.

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