IQ 50 Percent Hedged FTSE International ETF (HFXI)

Overview

The IQ 50 Percent Hedged FTSE International ETF (HFXI) seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the FTSE International Developed ex North America Index, hedged to reduce exposure to fluctuations between the value of the U.S. dollar and the currencies of the countries included in the index by 50%. It focuses on developed markets outside North America and aims to mitigate currency risk.

Reputation and Reliability

IndexIQ is known for its alternative and thematic ETFs. Their reputation is generally solid, offering innovative solutions.

Management Expertise

IndexIQ has a team experienced in managing alternative investment strategies and currency hedging.

Goal

To provide investment results that correspond generally to the price and yield performance of the FTSE International Developed ex North America Index, with 50% currency hedging.

Investment Approach and Strategy

Strategy: Tracks the FTSE International Developed ex North America Index with a 50% currency hedge.

Composition Primarily holds stocks from developed countries outside North America.

Market Share: HFXI's market share within its specific currency-hedged international equity niche is relatively small compared to broader unhedged international ETFs.

Total Net Assets (AUM): 45747946

Key Competitors

• DBEF
• VEA
• IEFA
• HEFA
• EFA

Competitive Landscape

The competitive landscape includes both unhedged and hedged international equity ETFs. HFXI's advantage is its currency hedging, appealing to investors concerned about currency fluctuations. A disadvantage is potentially lower returns in periods when the U.S. dollar weakens against other currencies, and the expense associated with the hedging strategy.

Historical Performance: Historical performance depends heavily on currency movements and market conditions in developed international markets. Data needs to be obtained from official sources.

Benchmark Comparison: The ETF's performance should be compared to the FTSE International Developed ex North America Index and a currency-hedged version of the same index.

Expense Ratio: 0.28

Average Trading Volume

The average trading volume of HFXI is relatively low, indicating potentially wider bid-ask spreads and less liquidity.

Bid-Ask Spread

The bid-ask spread varies, but is typically wider than more liquid ETFs due to the lower trading volume.

Market Environment Factors

Economic growth in developed international markets, interest rate differentials, and geopolitical events influence HFXI's performance. Currency fluctuations significantly impact returns due to the hedging strategy.

Growth Trajectory

Growth is dependent on investor demand for currency-hedged international equity exposure and the relative performance of developed international markets.

Competitive Edge

HFXI offers a specific currency-hedged approach to international equity investing. This helps reduce the impact of currency fluctuations on returns, which appeals to risk-averse investors. Its strategy targets investors concerned about USD strengthening. This focus provides a differentiating factor compared to broader unhedged international equity ETFs.

Volatility

Volatility is influenced by the volatility of the underlying international equity markets and the effectiveness of the currency hedging strategy.

Market Risk

Market risk includes the risk of declines in international equity markets and the risk that the currency hedging strategy may not fully protect against currency fluctuations, or may even detract from performance if the dollar weakens.

Ideal Investor Profile

Investors seeking international equity exposure while mitigating the impact of currency fluctuations, particularly those concerned about a strengthening U.S. dollar, are ideal investors for HFXI.

Market Risk

HFXI is suitable for long-term investors looking for international diversification with reduced currency risk, but it might not be suitable for active traders due to lower liquidity.

The IQ 50 Percent Hedged FTSE International ETF provides exposure to developed international equities with a 50% currency hedge, aiming to reduce the impact of currency fluctuations on returns. Its lower liquidity and specialized strategy cater to investors focused on managing currency risk rather than maximizing short-term gains. The expense ratio is moderate, reflecting the cost of the hedging strategy. This makes it suitable for long-term investors concerned about a strengthening U.S. dollar who seek international diversification with mitigated currency risk.

Data Sources:

• IndexIQ website
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The information provided is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions. Market share data is estimated and may vary. Performance data needs to be verified from official sources.