"For investors wishing to mitigate currency fluctuation risk for European market investments, xTrackers MSCI Europe Hedged Equity ETF (NYSE: DBEU) is one of a small few that fit the bill, yet still outpaces the Vanguard' S&P 500 ETF (NYSE: VOO) and State Street's S&P 500 ETF (NYSE: SPY). Currency hedging is a nonexistent issue for US focused funds, since more than 99% of the time, all of the securities are entirely denominated in US dollars."
"Although unhedged European market ETFs may boast 30%+ YTD gains for 2025, their intrinsic volatility capacity against the US dollar can cause some investors many sleepless nights, especially given the US dollar's 2025 trading range. Although DBEU deploys a currency hedge protocol, which limits upside with a collar in exchange for curbed volatility, its 20.18% return YTD still outperforms the S&P 500 tracking VOO's 18.7% and SPY's 18.6%."
Currency exposure matters for European investments because securities can be denominated in euros, pounds, krona, krone, or Swiss francs, creating valuation volatility versus the US dollar. Large unhedged European ETFs recorded 30%+ YTD gains partly due to an earlier 11% US dollar downturn in 2025, amplifying returns. DBEU uses a US dollar hedging protocol with a collar that limits upside in exchange for reduced volatility. DBEU returned 20.18% YTD, outperforming VOO at 18.7% and SPY at 18.6%. DBEU is passively managed to track the MSCI Europe US Dollar Hedged Index and launched in October 2013.
Read at 24/7 Wall St.
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