BlackRock launches European equities currency hedged ETF

Newest addition to iShares currency hedged suite in Europe…. 

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BlackRock has launched an ETF that invests in large- and mid-cap stocks from developed European Economic and Monetary Union countries and has a built-in US dollar currency hedge.

The iShares MSCI EMU USD Hedged UCITS ETF (EMUU) tracks an index containing approximately 240 stocks from 10 developed countries that are within the European Economic and Monetary Union. The impact of fluctuations in the Euro on an investor’s total return is reduced by using a US dollar hedge. The fund is physically replicating, purchasing and holding the underlying stocks, and has a total expense ratio of 38 basis points.

This is iShares’ first US dollar hedged European equities fund, which brings the provider’s currency hedged suite in Europe to 14 products. The range offers investors flexibility to opt for hedged or unhedged exposures – or a combination of both – in their international portfolios.

BlackRock’s Tom Fekete, Head of Product for iShares in EMEA, commented: “Many investors are interested in the prospects for European stocks but want new ways to invest in a risk managed fashion. Europe has experienced a cyclical rebound from 2014 and equity valuations are attractive relative to those in the US. At the start of 2015, corporate earnings revisions in Europe turned positive for the first time since 2010.

“One of the benefits of a currency-hedged ETF is that investors don’t have to maintain an independent hedge and can separate and control their currency risk. We already offer unhedged and Swiss franchedged ETFs based on this index, as well as funds based on other European equity indexes, and the launch reflects our desire to meet client demand for new types of product.”

According to BlackRock’s ETP Landscape report published in May 2015, pan-European equity ETFs have been one of the industry’s most popular asset classes in 2015. They attracted $42.1bn in new money during the first five months of 2015, bringing the total invested in European equity ETFs to $254bn at the end of May.


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