SPDR ETFs offer investors cost-effective1, flexible, transparent tools for managing currency exposures across equity and fixed income allocations. Built through partnerships with investors and index providers and fueled by our institutional expertise, our currency-hedged share classes allow investors to target their exposures.
For international investors, currency movements can be a major driver of returns across asset classes. This is especially true in a low-return environment where currency swings can overwhelm the returns of the underlying asset.
Hedging selected currency exposures allows investors to focus on the return drivers that they want to own and reduce the number of variables affecting portfolio performance.
SPDR ETF hedging options are built as separate share classes of the underlying fund. This makes it simple and cost-effective to switch between hedged and unhedged positions.
Premiums for hedged share classes of SPDR ETFs range from 0 bps to
Tracking a currency-hedged benchmark provides investors full visibility into the methodology, fees and past performance of the hedging strategy.
Built in partnership
When regulations required UCITS funds to operate hedged share classes within a hedged ratio of 95%-105% to the underlying NAV, other ETF providers stopped tracking hedged benchmarks. But at SPDR, we worked with our index partners to create indices with transparent methodologies that would satisfy the new rules.
Backed by a currency leader
SPDR ETFs are backed by State Street’s more than 30 years of experience managing currency exposures for sophisticated institutional investors. We created one of the industry’s first dedicated currency management teams and continue to prioritise currency exposure as a major contributor to investment performance.
Accessing US ESG corporate bond exposure in EUR
While US corporate bonds may offer yield in a low rate environment, the USD fluctuations could impact returns. This EUR-hedged share class can protect against USD currency moves, and also offers a best-in-class/positive screening ESG approach.
Minimising exposure to USD volatility
For investors looking to reduce their exposure to volatility in the USD market, we provide multiple ETFs which deliver the desired underlying exposure without the unintended USD currency risk.
Accessing return drivers in emerging markets
Local currency premiums can be a major contributor to emerging market returns. By offering a share class that hedges only the base currency of the portfolio, we enable investors to accept the emerging market currency risk without also incurring USD risk.
Hedging convertible bond exposures
SPDR is the only provider that offers a currency-hedged product tracking global convertible bond exposure. This product, which includes securities denominated in 11 different currencies, showcases the expertise of our specialist managers and our skill at executing multi-currency hedges efficiently.
Whether you are looking to fully hedge all currency exposure or selectively target returns in specific currencies, SPDR ETFs provide flexible, cost-effective solutions for executing your views with precision.
1Frequent trading of ETFs could significantly increase commissions and other costs such that they may offset any savings from low fees or costs
Currency Risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.
Currency Hedging involves taking offsetting positions intended to substantially offset currency losses on the hedged instrument. If the hedging position behaves differently than expected, the volatility of the strategy as a whole may increase and even exceed the volatility of the asset being hedged. There can be no assurance that the Fund’s hedging strategies will be effective.
EXP: 30 June 2024