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Find out about hedged Currency Funds

The WisdomTree Currency Hedged Emerging Markets Fund and the WisdomTree Currency Hedged DEFA Fund follow indexes that seek to reduce the effects of the changes in the holdings local currencies vs. the dollar. The prospectus states that the returns on international equity investments feature are made up if two components. One being the return resulting from changes in international stock prices and the second being the return resulting from fluctuations in foreign currencies in relation to the U.S. dollar. Both of the WisdomTree indexes incorporate one-month forward currency contracts that will help reduce the effects of those currency fluctuations, although it is probably not possible to eliminate them entirely. Essentially, the currency indexes are designed to realize more upside than a noncurrency-hedged index when the U.S. dollar’s value is increasing relative to foreign currencies, and realize more downside when the U.S. dollar value is declining.

The WisdomTree Currency Hedged DEFA Fund’s underlying index is a hedged currency version of the WisdomTree DEFA Index, and it coverings the Far East, Europe, and Australia. The index can include components from each of the 16 developed European markets in the WisdomTree Europe Dividend Index, as can also include Hong Kong, Japan, Singapore, Australia and New Zealand.

The WisdomTree Currency Hedged Emerging Markets Fund will track an index that covers Chile, Argentina, Brazil, China, India, Czech Republic, Philippines, Hungary, Malaysia, Indonesia, Israel, Mexico, Russia, Poland, South Africa, South Korea, Taiwan, Thailand or Turkey.

These two currency exchanged traded funds give currency investors two more options when trading currency.

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