As uncertainty over the direction of the Australian dollar continues for self-managed super fund (SMSF) investors, State Street Global Advisors (SSgA) has launched an exchange-traded fund (ETF) aimed at providing investors with access to international equities whilst also mitigating against what is an increasingly apparent currency risk.
Amanda Skelly, head of SPDR ETFs in Australia for SSgA, said that the new product – dubbed the SPDR S&P World ex-Australia (Hedged) Fund – would complement its existing unhedged counterpart, giving investors access to approximately 350 international equities in sectors that were either unavailable or difficult to access in the Australian marketplace.
“This latest hedged version of SSgA’s global equities ETF reflects investor demand for access to the same impressive selection of international companies while minimising the impact of currency changes on the value of their investment,” she said.
“There is certainly a loud and ongoing debate about the direction of the Australian dollar, but stripping away the noise it is clear that, for many investors who are trying to achieve diversification, it is challenging enough without the added complexity of guessing where the currency is heading.”
And while SMSFs have traditionally had low allocations to both overseas shares and managed investments, Skelly said that there was increasing evidence that investors were seeking to reduce their local bias.
“Australian investors now have another significant building block to help them construct a diversified portfolio, which holds global brands and other international market-leading companies such as Adidas, Toyota and Louis Vuitton,” she said.
“It is clear from recent ASX inflow data that investors are now seeking to reduce the local bias in their portfolios and turning to international equity ETFs.
“But until now investors have not had the capability to access global stocks while at the same time managing tax and currency implications of this diversification built into the product.”
