Investing in Currencies

Currency-hedged exchange traded funds remain resolutely out of favour in the US — despite posting outsized returns in the past year.The largest currency-hedged ETFs in the US all comfortably outperformed their unhedged equivalents last year, helped by the strength of the dollar, which rose 6.7 per cent against a basket of six other developed world currencies, as measured by the DXY index.Yet the collective assets of US-listed currency-hedged ETFs — which neutralise the movement in foreign currencies against the dollar while still providing exposure to overseas assets — ended last...