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MSCI currency hedged indexes

tools for investors focused on the impact of currency

To hedge or not to hedge currency is a question that ultimately depends on an investor’s specific circumstances, including risk tolerance, investment horizon and any view on the currency markets. Investors who wish to express a view on currency or remove currency risk often seek to hedge their foreign currency exposure without altering their underlying equity exposure. For such investors, the MSCI Hedged Indexes may be a useful tool as they seek to measure the equity performance of an MSCI Parent Index, while removing the impact of currency.
 

Simple and Effective

MSCI can apply the Hedged Index Methodology to any MSCI index. The MSCI Hedged Indexes include all of the securities and weights of each corresponding unhedged MSCI Parent Index, enabling investors to measure the impact of hedging currency, for all the constituents of the Parent Index.

MSCI Currency Hedged Indexes have shown to reduce overall volatility and provide risk control by allowing investors to separate currency risk within their portfolios.
 

Key Features and Benefits
  • Straight forward index methodology, combining performance of a monthly currency forward contract with the return of an unhedged MSCI Parent Index
  • Effective tool for global investors who seek to remove the risk of fluctuating exchange rates, or who have a view on currency
 

OUR COMPETITIVE EMPHASIS

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WHAT MATTERS MOST TO OUR CLIENTS

Accuracy, timeliness and transparency

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Accurate measures of markets and fair benchmarks

Replicability

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Cost effective solutions and implementation

Unbiased representation of the market through MSCI’s global framework

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Broader approach without country/sector biases and longer history with a consistent methodology across all markets

Quarterly index reviews

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Minimizes turnover while balancing timely representation


1 $30B in FY’15 flows linked to MSCI hedged indexes – highest among all index providers. As of December 31, 2015; defined as each share class of an exchange traded fund, as identified by a separate Bloomberg ticker. Only primary listings, and not cross-listings, are counted.
 
PERFORMANCE, FACTSHEETS AND METHODOLOGY

MSCI Hedged Indexes Methodology

MSCI ACWI 100% Hedged to USD

Performance | Factsheet

MSCI ACWI ex US 100% Hedged to USD

Performance | Factsheet

MSCI ACWI Minimum Volatility (USD) 100% Hedged to USD

Performance | Factsheet
 

MSCI DEVELOPED MARKETS INDEXES

MSCI EAFE 100% Hedged to USD Index

Performance | Factsheet

MSCI EAFE Minimum Volatility (USD) 100% Hedged to USD

Performance | Factsheet

MSCI EAFE Small Cap 100% Hedged to USD

Performance | Factsheet

MSCI EMU 100% Hedged to USD Index

Performance | Factsheet

MSCI Europe Minimum Volatility (USD) 100% Hedged to USD

Performance | Factsheet

MSCI Europe Small Cap 100% Hedged to USD

Performance | Factsheet

MSCI Germany 100% Hedged to USD Index

Performance | Factsheet

MSCI Japan 100% Hedged to USD Index

Performance | Factsheet

MSCI Spain 25-50 100% Hedged to USD

Performance | Factsheet

MSCI Italy 25-50 100% Hedged to USD

Performance | Factsheet

MSCI United Kingdom 100% Hedged to USD

Performance | Factsheet

MSCI Canada 100% Hedged to USD

Performance | Factsheet

MSCI Australia 100% Hedged to USD          

Performance | Factsheet

MSCI Switzerland 25-50 100% Hedged to USD

Performance | Factsheet
 

MSCI EMERGING MARKETS INDEXES

MSCI Emerging Markets 100% Hedged to USD Index

Performance | Factsheet

MSCI Emerging Markets Minimum Volatility (USD) 100% Hedged to USD

Performance | Factsheet

MSCI Korea 25-50 100% Hedged to USD

Performance | Factsheet

MSCI Mexico IMI 25-50 100% Hedged to USD

Performance | Factsheet

Research Insight

Currency Hedging: Adapting to Volatility (April 2016).
In the past, institutional investors largely ignored currency hedging in their international equity portfolios. With the globalization of the equity portfolio and recent market volatility, they no longer can afford to do so.

Issue Brief

Currency Hedged Indexes: Why Currency and Currency Hedging Matter (July 2015).
The growth of international investing makes it important to understand the impact of currency movements.

MSCI webinar

Agenda Topics Include:
- Why hedge currency risk?
- Construction of the MSCI Hedged Indexes
- Risk and return characteristics

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