UBS Asset Management has launched eight GBP-hedged smart beta ETFs as it sees currency playing a bigger part in returns.
The launches will give investors access to factor-based exposures in the US and Europe, but with results hedged back to the pound. UBS says.
“Currency fluctuations can have a major impact on investment returns with more proactive global monetary policy exacerbating currency volatility in recent years,” says UBS.
The asset manager gives the example of the returns from the MSCI European Monetary Union index, which has seen annual returns of 6.38 per cent, but for an unhedged British investor this would have fallen to 3.45 per cent.
Andrew Walsh, head of UBS ETF sales for UK and Ireland, says: “Our investors here in the UK will now be able to access specific targeted factor risk-premia in the US and Eurozone equity markets whilst managing currency risk.
“It is becoming increasingly evident that ‘alternative beta’ or ‘factor investing’ is a category that is growing in interest for clients and will increasingly be considered a core part of portfolios.”