Press Releases

BlackRock launches iShares Adaptive Currency Hedged ETFs

Jan 06, 2016

BlackRock launches iShares Adaptive Currency Hedged ETFs

Funds aim to help investors manage effect of strengthening U.S. dollar on international investments

January 6, 2016, New York – BlackRock, Inc. (NYSE: BLK) today launched three iShares Adaptive Currency Hedged ETFs which aim to help investors manage the effect of a strengthening U.S. dollar on international investments:

• iShares Adaptive Currency Hedged MSCI EAFE ETF  (BATS: DEFA)
• iShares Adaptive Currency Hedged MSCI Eurozone ETF  (BATS: DEZU)
• iShares Adaptive Currency Hedged MSCI Japan ETF  (BATS: DEWJ)


Ruth Weiss, Head of U.S. iShares Product at BlackRock commented: “iShares Adaptive Currency Hedged ETFs offer a single solution for investors looking to gain exposure to international equity returns, without having to worry about when to hedge or unhedge the associated foreign currency exposure. Investors have seen how fluctuating exchange rates can impact their global equity returns, but trying to anticipate or react to currency movements is difficult and requires frequent monitoring.”

Listed on BATS and based on MSCI indices, iShares Adaptive Currency Hedged ETFs offer investors adaptive hedged exposure to three regions: International Developed (DEFA), the Eurozone (DEZU) and Japan (DEWJ). The new funds will begin trading on January 7th.

“With the Fed tightening monetary policy and other major central banks - including the ECB and Bank of Japan - continuing to ease, macro conditions should continue to remain supportive of U.S. dollar strength this year”, said Heidi Richardson, Head of Investment Strategy for U.S. iShares. “However, markets have a way of upending seemingly logical investment theses, and we anticipate that there will be some bumps along the road.  In this hard-to-predict environment, U.S. investors may be prudent to consider a flexible approach to hedging currency risk.”

The iShares Adaptive Currency Hedged ETFs seek to track investment results of MSCI indices composed of large-and mid-cap international equities, while systematically determining whether to hedge, unhedge or partially hedge currency risk for a U.S. dollar-based investor. By periodically shifting their hedge ratios, the funds aim to adapt to different currency environments -- for example, seeking to capture positive foreign currency returns when the U.S. dollar weakens relative to the local currency and minimize negative foreign currency return when it strengthens.  Each fund will have a hedge ratio between 0-100% that is determined each month based on four commonly-used currency indicators: interest rate differentials, relative valuation, volatility and momentum.

Diana Tidd, Managing Director and Global Head of MSCI Equity Index Products, said: “Currency volatility has increased and currency movements can have both risks and opportunities. MSCI’s Adaptive Hedge Indexes can provide important insight to help support a dynamic approach to identifying the risks and opportunities associated with currency movements.”

iShares Adaptive Currency Hedged ETFs complement iShares existing suite of international unhedged and fully hedged ETFs, giving investors even greater choice when selecting international investments.

The launch of these three Adaptive Currency Hedged ETFs expands iShares U.S. currency hedged suite to 26 funds, a comprehensive offering across global, regional and single country exposures.

About BlackRock

BlackRock is a global leader in investment management, risk management and advisory services for institutional and retail clients. At September 30, 2015, BlackRock’s AUM was $4.506 trillion. BlackRock helps clients around the world meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. As of September 30, 2015, the firm had approximately 12,900 employees in more than 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company’s website at www.blackrock.com | Twitter: @blackrock_news | Blog: www.blackrockblog.com | LinkedIn: www.linkedin.com/company/blackrock

About iShares

iShares is a global leader in exchange-traded funds (ETFs), with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than $1 trillion in assets under management as of September 30, 2015, iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.[1]

[1] Based on $4.506 trillion in AUM as of 9/30/15.

Carefully consider the iShares Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses and, if available, summary prospectuses, which may be obtained by calling 1-800-iShares (1-800-474-2737) or by visiting www.iShares.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

The Funds’ use of derivatives may reduce the Funds’ returns and/or increase volatility and subject the Funds to counterparty risk, which is the risk that the other party in the transaction will not fulfil its contractual obligation. The Funds could suffer losses related to their derivative positions because of a possible lack of liquidity in the secondary market and as a result of unanticipated market movements, which losses are potentially unlimited. There can be no assurance that the Funds’ hedging transactions will be effective. The Funds are subject to the risks of the underlying funds.

International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets and in concentrations of single countries.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).

The iShares Funds are not sponsored, endorsed, issued, sold or promoted by MSCI Inc., nor does this company make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with MSCI Inc.

©2016 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their respective owners. iS-17441

 

Contacts:

 

Melissa Garville: 212-810-5528

 

Peter McKillop: 212-810-3737

 

 

[1] Based on $4.506 trillion in AUM as of 9/30/15.

This information has been provided for use in the U.S. and should not be relied upon by any other person and should not be circulated to anyone else without our consent or given or shown to the general public under any circumstances.