Discount brokerage giant Charles Schwab Corp (NYSE: SCHW) is adding to what is already the exchange-traded fund industry's largest commission-free platform with the addition of five currency hedged funds to Schwab ETF OneSource.
Schwab said Thursday it is adding the following funds from IndexIQ to Schwab ETF OneSource:
- ProShares Hedged FTSE Europe ETF (ProShares Trust (NYSE: HGEU))
- ProShares Hedged FTSE Japan ETF(NYSE: HGJP)
- IQ 50 Percent Hedged FTSE International ETF (NYSE: HFXI)
- IQ 50 Percent Hedged FTSE Europe ETF (NYSE: HFXE)
- IQ 50 Percent Hedged FTSE Japan ETF (NYSE: HFXJ)
Related Link: J.P. Morgan Debuts Its Fourth ETF
Currency Hedged ETFs
The currency hedged ETFs from ProShares debuted in June with annual expense ratios of 0.27 percent and 0.23 percent, making them the pair far less expensive than rival Europe and Japan currency hedged ETFs.
The asset-weighted average expense ratio for currency hedged European equity ETFs was 0.56 percent and for currency hedged Japanese ETFs was 0.47 percent, according to ProShares.
The IQ 50 Percent Hedged FTSE International ETF, IQ 50 Percent Hedged FTSE Europe ETF and the IQ 50 Percent Hedged FTSE Japan ETF, each of which debuted in July, are 50 percent currency hedged, representing a new spin on the traditional currency hedged ETFs that have become so popular with investors since last year.
“Unlike currency indexes available today which hedge 100 percent of the US dollar currency exposure of the underlying securities, this new suite of indexes from FTSE Russell hedges against 50 percent of the fluctuations between the US dollar and the home currency of the underlying index constituents,” according to FTSE Russell, the index provider for HFXE, HFXJ and HGEU.
Schwab ETF OneSource
ALPS, Direxion, ETF Securities, Global X Funds, Guggenheim Investments, IndexIQ, J.P. Morgan Asset Management, PIMCO, PowerShares, ProShares, State Street SPDR ETFs, United States Commodity Funds, WisdomTree and Charles Schwab Investment Management are the issuers featured on Schwab ETF OneSource.
With Thursday's additions, “investors can now buy and sell 214 ETFs covering 66 Morningstar Categories with $0 online commissions, no enrollment requirements and no early redemption fees – key differentiators for investors comparing Schwab ETF OneSource to other commission-free ETF offerings,” said California-based Schwab in a statement.
At the end of August, OneSource had $44.2 billion in assets under management, $8.1 billion of which had arrived this year.
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