Your ETF Is Not All It Seems for Emerging-Market Currency Hedges
- Not everything gets hedged in `hedged' exchange traded funds
- It's buyer beware when volatility shatters correlations
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The devil is in the details for investors looking for safer emerging-market assets after a currency rout that’s stretched from Russia to Brazil.
More than $1.6 billion has flowed into exchange-traded funds that protect against currency fluctuations in developing nations this year, 82 percent more than in all of 2014. Yet buyers of these products, from moms and pops to institutional investors, may not be as protected as they think.