Ben Slavin, a prominent figure in the ETF sphere at BNY and managing director, emphasized the robust investment currents flowing into markets such as India, Europe, and Japan. However, he cautioned that these ventures should take into account the powerful influence of the U.S. dollar.
“One should consider the dollar’s influence on investment returns when deciding on currency-hedged or non-hedged positions given its significant role in forecasting market trajectories,” Slavin advised during an appearance on CNBC’s “ETF Edge” this past Monday.
Specifically, Slavin highlighted the currency dynamics at play, particularly between the U.S. dollar and the Japanese yen.
The iShares MSCI Japan ETF (EWJ) offers investors Japanese market participation but doesn’t shield them from yen-dollar fluctuations, resulting in a modest growth of less than four percent over the year.
Conversely, the WisdomTree Japan Hedged Equity Fund (DXJ), which takes into consideration currency value shifts, has seen an increase of more than 20% during the same period.
Slavin underscores the gravity of making well-informed investment choices, particularly in relation to the anticipated movement of the U.S. dollar. He points out that ETFs afford investors multiple avenues for positioning their investment in light of their currency perspectives.
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