Skip to Content
scroll

Is there an ETF to hedge against a falling $US?

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

The Latest Q&A

Question asked

Is there an ETF to hedge against a falling $US?

Hi James Is there an ASX listed ETF that can be used to hedge the international equities portfolio against a rising AUD? Many thanks Alex

Answer

Hi Alex,

The best option is the BetaShares Strong Australian Dollar ETF (AUDS) which is traded on the ASX. Its goal is to track the performance of the $A v $US, it provides geared exposure to the $A of around 2.5x i.e. a 1% rally by the $A against the $US will generate a 2.5% return, and of course vice versa.

This allows investors to hedge all or part of their US international exposure. e.g. if you have $A1000 in Apple it would be closely hedged against a fall in the $US by having $400 in the AUDS but always remember there will be no benefit if the $A falls.

We prefer a non-hedged exposure with the currency movements working to create a smoother ride.

chart
image description
Australian Dollar (AUDUSD)
image description

Relevant suggested news and content from the site

Back to top