Available on the London Stock Exchange from 3 July, the iShares MSCI EMU USD Hedged UCITS ETF will track MSCI EMU 100% Hedged to USD Index.
Targeting large and mid-caps from an index total of 240 stocks across 10 developed countries, the fund will seek to minimise euro volatility by utilising a US dollar currency hedge.
Tom Fekete, BlackRock’s head of product for iShares EMEA, outlined the ongoing European equity story versus the US market as a driver behind the ETF launch.
“Many investors are interested in the prospects for European stocks but want new ways to invest in a risk managed fashion,” he said. “Europe has experienced a cyclical rebound from 2014 and equity valuations are attractive relative to those in the US.
“At the start of 2015, corporate earnings revisions in Europe turned positive for the first time since 2010. “One of the benefits of a currency-hedged ETF is that investors don’t have to maintain an independent hedge and can separate and control their currency risk.”
Carrying a total expense ratio of 38 basis points, the fund’s target index comprises stocks in France, Germany, Spain, the Netherlands, Italy, Belgium, Finland, Ireland, Austria and Portugal.
It is BlackRock’s 14th ETF that carries a currency hedge capability, coming three months after the firm launched sterling and yen offerings and following its prediction that European ETF space assets will double by 2019.
