ETFdb Logo
  • ETF Database
  • Channels
    • Themes
      • Active ETF
      • Alternatives Channel
      • Artificial Intelligence
      • China Insights
      • Climate Insights
      • Core Strategies
      • Crypto
      • Disruptive Technology
      • Energy Infrastructure
      • ETF Building Blocks
      • ETF Education
      • ETF Investing
      • ETF Strategist
      • Faith-Based Investing
      • Financial Literacy
      • Fixed Income
      • Free Cash Flow
      • Innovative ETFs
      • Invest Beyond Cash
      • Leveraged & Inverse
      • Modern Alpha
      • Portfolio Strategies
      • Tax Efficient Income
    • Asset Class
      • Equity
        • U.S. Equity
        • Int'l Developed
        • Emerging Market Equities
      • Alternatives
        • Gold/Silver/Critical Materials
        • Crypytocurrency
        • Currency
        • Volatility
      • Fixed Income
        • Investment Grade Corporates
        • US Treasuries & TIPS
        • High Yield Corporates
        • Int'l Fixed Income
    • ETF Ecosystem
    • ETFs in Canada
    • Market Outlook
    • Crypto ETF Hub
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Database Categories
    • Indexes
    • Scenario Analysis
    • Watchlists
    • Head-To-Head ETF Comparison Tool
    • Mutual Fund To ETF Converter
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • Gaining Perspective Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. ETF 360: IndexIQ’s Dan Petersen on Currency Hedging
News
Share

ETF 360: IndexIQ's Dan Petersen on Currency Hedging

Evan HarpJul 25, 2023
2023-07-25

On the latest episode of “ETF 360,” VettaFi head of research Todd Rosenbluth was joined by IndexIQ’s Dan Petersen. The two discussed IndexIQ’s fund, the IQ FTSE International Equity Currency Neutral ETF (HFXI B+), and the impact of currency hedging.

Currency Impact

“Currencies actually have quite a substantial impact on international equity investing,” Petersen said. He noted that typical U.S. investors will convert their currency into the proper one for a given market to invest in the equities there. That conversion has an impact. “It’s not just an isolated return of what happens overseas,” added Petersen.

Currencies do tend to revolve around a parity value. Unfortunately, it can be challenging to predict where they will go in the mid and long term. Speaking to the short term, Petersen said, “the choppiness short term can really destroy a holding.”


Content continues below advertisement

Thinking About Tactics

Petersen shared that many investors don’t tend to think tactically about currencies. He pointed to the hedging of Japan’s currency last decade and the bullishness on Japanese equities. Though things played out well for funds looking to take advantage, based on AUM, funds flowed in too late. “The performance happened, assets flowed into hedged products, then they underperformed,” Petersen said, adding, “I think that experience really haunted a lot of investors and advisors.” He noted that less than 1% of AUM in foreign large blend is hedged today. However, the value remains there.

Keeping the Neutral View and Hedging

“Most people don’t want to have a view or position in a passive nature when looking at ETFs, and one way to do that would be to have a 50% currency hedge.” According to Petersen, this provides the benefits of foreign currency appreciation. However, since you aren’t completely hedged, you can avoid years like 2022 — which was a problem for hedge-focused strategies. Being only 50% hedged offers some downside mitigation while still capturing upside.

“You get the best of both worlds,” Petersen said.

HFXI uses a 50% currency hedge to gain the upside of currency appreciation while hedging against the downside.

To watch past episodes of ETF 360, visit the ETF 360 Channel.

» Popular Pages

  • Tickers
  • Articles

Jul 11

Main Management Market Note: July 11, 2025

Jul 11

Treasury Yields Snapshot: July 11, 2025

Jul 11

S&P 500 Snapshot: Index Retreats From Record High

Jul 11

Bitcoin's Real-World Utility: A Strategic Asset for U.S. Investors and Global Markets

Jul 11

Economic Crosscurrents in 2025: Inflation, Interest Rates, and Investment Strategy

Jul 11

June 2025’s Most Innovative ETF Launches

Jul 11

As Congress Mulls Muni Tax Repeal, Here's 8 ETFs to Ponder

Jul 11

Fidelity, T. Rowe Price, JPMAM Active International ETFs Outperform EFA

Jul 11

Market Update – July 11, 2025

Jul 11

Behind Buffer ETFs’ Latest First-of-a-Kind Strategies

QQQ

Invesco QQQ Trust Series I

VOO

Vanguard S&P 500 ETF

IBIT

iShares Bitcoin Trust ETF

SPY

SPDR S&P 500 ETF Trust

SCHD

Schwab US Dividend Equity ETF...

IVV

iShares Core S&P 500 ETF

AIQ

Global X Artificial...

SMH

VanEck Semiconductor ETF

FIAT

YieldMax Short COIN Option...

GLD

SPDR Gold Shares


Content continues below advertisement

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2025 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X