iShares, the exchange-traded fund (ETF) business of BlackRock,
(NYSE: BLK), launched three currency hedged ETFs designed to reduce the
impact of currency fluctuations on returns when investing in foreign
countries. The iShares Currency Hedged MSCI EAFE ETF (NYSEArca; HEFA),
iShares Currency Hedged MSCI Germany ETF (NYSEArca: HEWG) and iShares
Currency Hedged MSCI Japan ETF (NYSEArca: HEWJ) expand iShares broad
international line-up that includes the multi-billion dollar, unhedged
iShares MSCI EAFE (NYSEArca: EFA), Germany (NYSEArca: EWG) and Japan
(NYSEArca: EWJ) ETFs.
Foreign investments often include the added risk of fluctuating exchange
rates, which can impact overall returns. The three new iShares ETFs
allow investors to access, in a single trade, international exposures
while reducing the risk of currency fluctuations. By investing in their
related unhedged, parent iShares ETFs (EFA, EWG and EWJ) and
implementing foreign currency forward contracts, iShares Currency Hedged
ETFs provide an easy and cost-effective way to mitigate unwanted
currency risk.
The new funds track indexes by MSCI, the premier international index
provider that employs a market-cap weighted methodology and provides
comprehensive local country exposure with diversified sector weightings.
The funds will also benefit from the deep liquidity of the parent
iShares ETFs, which are expected to provide the iShares Currency Hedged
ETFs with ample secondary market liquidity and the ability to
efficiently create and redeem shares.
The funds are managed by BlackRock’s Index Asset Allocation Team, which
has over 50 years of combined experience and manages over $35 billion in
currency-related assets. iShares has also managed currency hedged ETFs
for over a decade, offering approximately 30 different funds
internationally.
Daniel Gamba, Head of iShares Americas Institutional Business at
BlackRock, commented:
“Today’s volatile global currency rates are causing investors with
international portfolios to pay closer attention to how they can manage
currency fluctuations. iShares Currency Hedged ETFs offer an efficient
and cost-effective solution in a single transaction, so investors don’t
have to manage complex currency hedging strategies. Investors with
positive views on Japanese, German or EAFE equities, but negative views
on local currencies relative to the U.S. dollar would be interested in
these ETF funds.”
Diana Tidd, Managing Director and Head of the MSCI Index Business in
the Americas, said:
“With the growth of global investing, the impact of currency movements
can be a significant issue. Investors are exposed to currency risk when
investing abroad and adverse moves in exchange rates can impact their
performance. Hedging currency exposure is one technique for taking
currency risk out of the equation.
“For investors using our widely followed market capitalization indexes
such as MSCI EAFE and MSCI Japan, the corresponding MSCI Currency Hedged
Indexes enable them to directly analyze and measure the performance of a
hedged equity index without the impact of currency but keeping the same
underlying country and sector exposures. We are pleased that iShares is
once again expanding their ETF suite based on MSCI indexes.”
About BlackRock
BlackRock is a leader in investment management, risk management and
advisory services for institutional and retail clients worldwide. At
December 31, 2013, BlackRock’s AUM was $4.324 trillion. BlackRock helps
clients meet their goals and overcome challenges with a range of
products that include separate accounts, mutual funds, iShares®
(exchange-traded funds), and other pooled investment vehicles. BlackRock
also offers risk management, advisory and enterprise investment system
services to a broad base of institutional investors through BlackRock
Solutions®. Headquartered in New York City, as of December 31, 2013,
the firm had approximately 11,400 employees in more than 30 countries
and a major presence in key global markets, including North and South
America, Europe, Asia, Australia and the Middle East and Africa. For
additional information, please visit the Company’s website at www.blackrock.com.
About iShares
iShares is a global product leader in exchange traded funds with over
600 funds globally across equities, fixed income and commodities, which
trade on 20 exchanges worldwide. The iShares Funds are bought and sold
like common stocks on securities exchanges. The iShares Funds are
attractive to many individual and institutional investors and financial
intermediaries because of their relative low cost and trading
flexibility. Investors can purchase and sell shares through any
brokerage firm, financial advisor, or online broker, and hold the funds
in any type of brokerage account. The iShares customer base consists of
the institutional segment of pension plans and fund managers, as well as
the retail segment of financial advisors and high net worth individuals.
Carefully consider the iShares Funds’ investment objectives, risk
factors, and charges and expenses before investing. This and other
information can be found in the Funds’ prospectuses, which may be
obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com.
Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal. International
investments may involve risk of capital loss from unfavorable
fluctuation in currency values, from differences in generally accepted
accounting principles or from economic or political instability in other
nations. Securities focusing on a single country may be subject to
higher volatility.
If and when a fund invests in forward foreign currency contracts or uses
other investments to hedge against currency risks, it will be subject to
special risks, including counterparty risk, which is the risk that the
other party in the transaction will not fulfill its contractual
obligation. Increased volatility will generally reduce the effectiveness
of a fund’s currency hedging strategy. While hedging can reduce or
eliminate losses, it can also reduce or eliminate gains. The iShares
Currency Hedge ETF’s hedging strategy will not necessarily eliminate the
funds’ exposure to the component currencies and there can be no
assurance that a fund’s hedging transactions will be effective.
Transactions in shares of the iShares Funds will result in brokerage
commissions and will generate tax consequences. iShares Funds are
obliged to distribute portfolio gains to shareholders. Shares of the
iShares Funds may be sold throughout the day on the exchange through any
brokerage account. However, shares may only be redeemed directly from a
Fund by Authorized Participants, in very large creation/redemption
units. Diversification may not protect against market risk or loss of
principal.
The iShares Funds are distributed by BlackRock Investments, LLC
(together with its affiliates, “BlackRock”).
Disclaimer
The Fund is not sponsored, endorsed, sold or promoted by MSCI or any
affiliate of MSCI. Neither MSCI nor any other party makes any
representation or warranty, express or implied, to the owners of the
shares of the Fund or any member of the public regarding advisability of
investing in funds generally or in the Fund particularly or the ability
of the Underlying Index to track general stock market performance. MSCI
is the licensor of certain trademarks, service marks and trade names of
MSCI and of the Underlying Index which is determined, composed and
calculated by MSCI without regard to the Company, BFA or its affiliates
or the Fund. MSCI has no obligation to take the needs of the BFA or its
affiliates or the owners of the shares of the Fund into consideration in
determining, composing or calculating the Underlying Index. MSCI is not
responsible for and has not participated in the determination of the
timing of, prices at, or quantities of the Fund to be issued or in the
determination or calculation of the equation by which the Fund is
redeemable for cash. Neither MSCI nor any other party has any obligation
or liability to owners of the shares of the Fund in connection with the
administration, marketing or trading of the Fund.
ALTHOUGH MSCI SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN
THE CALCULATION OF THE INDEXES FROM SOURCES WHICH MSCI CONSIDERS
RELIABLE, NEITHER MSCI NOR ANY OTHER PARTY GUARANTEES THE ACCURACY
AND/OR THE COMPLETENESS OF THE INDEXES OR ANY DATA INCLUDED THEREIN.
NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND
COUNTERPARTIES, OWNERS OF THE SHARES OF THE FUND, OR ANY OTHER PERSON OR
ENTITY FROM THE USE OF THE INDEXES OR ANY DATA INCLUDED THEREIN IN
CONNECTION WITH THE RIGHTS LICENSED BY MSCI FOR USE HEREIN OR FOR ANY
OTHER USE. NEITHER MSCI NOR ANY OTHER PARTY MAKES ANY EXPRESS OR IMPLIED
WARRANTIES, AND MSCI HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE
INDEXES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL MSCI OR ANY OTHER PARTY HAVE ANY LIABILITY
FOR DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY OTHER
DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.
©2014 BlackRock. All rights reserved. iSHARES, BLACKROCK, and
BLACKROCK SOLUTIONS are registered and unregistered trademarks of
BlackRock. All other marks are those of their respective owners.
iS-11580-0114
Copyright Business Wire 2014