WisdomTree has announced it is launching a GBP-hedged share class for its US Equity Income UCITS ETF to combat currency volatility connected to macro events.
Nizam Hamid, WisdomTree ETF strategist, says: “In addition to providing a hedge against currency risk, this accumulating share class allows investors to benefit from the compounded returns in dividend-based strategies.”
WisdomTree says Brexit, quantitative easing and an expected US Fed rate hike have reminded investors about the importance of hedging out currency risk.
The new share class for the ETF, which applies a dividend weighting methodology to high yielding US equities, will be listed on the London Stock Exchange.
Head of European distribution Morgan Lee says: “Managing currency risk – as witnessed through recent moves in Sterling as well as delivering operational benefits means that this is an effective solution for the investment and macro challenges faced by our clients.”
“This additional share class is also a reflection of the positive feedback we have had from clients wanting to benefit from the efficiency of the share class structure we can offer.”