Have Your Cake And Eat It, Too, With Currency Hedged Dividend ETFs

One thing issuers of exchange traded funds are particularly adept at is milking a hot a theme. That is certainly true of currency hedged funds, which are among this year's top asset-gathering ETFs.

Consider this: In a single day earlier this year, BlackRock Inc. (NYSE: BLK)'s iShares unit, the world's largest issuer of ETFs, launched 11 currency hedged products. On August 12 and August 19, Deutsche Asset & Wealth Management (Deutsche AWM) launched a combined 10 currency hedged ETFs.

Deutsche AWM's August 12 launches were comprised of a quartet of dividend ETFs with currency hedged kickers. Those new funds are the Deutsche X-trackers ACWI ex-U.S. High Dividend Yield Hedged Equity ETF (NYSE: HDAW), Deutsche X-trackers Emerging Markets High Dividend Yield Hedged Equity ETF (NYSE: HDEE), Deutsche X-trackers EAFE High Dividend Yield Hedged Equity ETF (NYSE: HDEF) and the Deutsche X-trackers Eurozone High Dividend Yield Hedged Equity ETF (NYSE: HDEZ).

Related Link: Another OPEC ETF Debuts

The marriage of dividends and currency hedging via ETFs, particularly developed market funds, makes sense. Especially at a time when equity markets in several major developed markets, including Australia, Germany and Japan, sport higher dividend yields than the yields on those countries' benchmark government bonds.

"Given the importance these products attach to dividends, it’s worth quickly recapping two related theories from corporate finance: Dividend Irrelevance and ...

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