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I track about a thousand funds using Mutual Fund Observer and have developed a ranking system to group equity funds into four categories based on risk, valuation, and/or yield. Tier One contains the Lipper Categories and funds that have a combination of lower risk, lower valuations, and higher yields. Tier Two contains those with low to moderate valuations and have lower risk.
UUP, IWM, HEFA, MGK, DBC and EEM are included in this Analyst Blog.
The U.S. dollar surges to a one-year high. We highlight ETFs that should benefit from a strong dollar and those that will lose.
Investing in international stocks exposes investors to currency risk, which can significantly affect returns. The iShares Currency Hedged MSCI EAFE ETF offers exposure to international equity markets, while mitigating currency risk. HEFA uses currency forward contracts to hedge against currency risk, providing investors with a unique selling point.
Allocating to international equities may offer notable returns and diversification benefits in a challenging economic environment. The iShares Currency Hedged MSCI EAFE ETF (HEFA) is a compelling instrument for exposure to global equities with a currency hedge. Factors supporting the case for global investments include sustained US outperformance, premium earnings growth in foreign markets, a high USD, and attractive valuations.
The U.S. dollar is experiencing significant gains in recent weeks, logging the longest rally in years.
Both the EFA ETF and HEFA ETF invest based on the MSCI EAFE Index, giving investors the choice of being hedged against the currency risk or not. This article updates my review from last February in terms of ETF holdings, distributions, and most importantly, returns. For investors who do not believe the USD will decline precipitously against other major currencies over a long period, I would give EFA a Sell rating and HEFA a Buy.
The latest minutes from the July Fed meeting revealed the possibility of longer-than-expected higher interest rates, pushing the U.S. dollar higher.