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International currency-neutral ETF draws $2 billion in assets
New York Life’s IQ FTSE International Equity Currency Neutral ETF (HFXI) hedges 50% of exposure across 14 currencies and has added $800 million in year-to-date inflows.
ETF Trends highlighted how international equity ETFs and currency hedging strategies are being marketed to investors looking to balance currency risk with diversification. In the latest ETF Prime episode, host Nate Geraci discussed the approach with Maria Rahni, senior director and equities product manager at New York Life Investments, and Sandra Testani of American Century.
Rahni focused on New York Life’s IQ FTSE International Equity Currency Neutral ETF (HFXI), described as the firm’s largest fund. The ETF has drawn over $2 billion in assets and nearly $800 million in year-to-date inflows, while tracking developed international markets outside North America and hedging 50% of currency exposure across 14 currencies.
She said the partial hedge is designed as a “hedge of least regret,” intended to avoid fully betting on dollar strength against foreign currency appreciation. Rahni also pointed to conditions she views as supportive for European and Japanese demand, including Germany’s defense and infrastructure spending as well as Japanese corporate governance reforms.
Testani broadened the conversation to fund platforms and fixed income. She described the combined American Century and Avantis platform as spanning 49 ETFs with nearly $160 billion in assets and about $40 billion in year-to-date inflows, and she noted elevated rate volatility as the key fixed income theme, favoring shorter duration strategies to reduce duration risk while keeping yields comparable to the Bloomberg AGG.
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