Amid inflows, BlackRock to expand currency-hedged ETF lineup

Wed Jul 1, 2015 9:00am EDT
 
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BOSTON, July 1 (Reuters) - BlackRock Inc plans to add 11 new funds to its lineup of iShares currency-hedged ETFs, executives said, amid growing demand for the products.

Jane Leung, a BlackRock managing director who oversees the sector, said in a telephone interview on Tuesday that BlackRock's five existing currency-hedged ETFs have about $7.4 billion in assets. About $6.6 billion of the total has come in over the past year.

Leung said the inflow shows that investors are paying more attention to the impact of changes in the relative value of currencies, such as the rapid rise in value of the U.S. dollar through the spring. "Investors have to look at currency more closely than ever," she said.

Other sponsors of currency-hedged ETFs have also reported strong inflows over the past year, according to figures from the Lipper unit of Thomson Reuters, including those offered by WisdomTree Investments and by a unit of Deutsche Bank.

BlackRock's new ETFs will include eight focused on specific countries, including Australia, Mexico and Spain, plus three that invest globally or outside the United States and Canada. They will invest in unhedged iShares ETFs and use contracts to reduce currency risk.

The hedged ETFs are more expensive for investors. The current iShares MSCI Australia ETF has an expense ratio of 0.48 percent, while the currency-hedged version will charge 0.51 percent, Leung said.

(Reporting by Ross Kerber; Editing by Dan Grebler)