What is a currency-hedged ETF?
It aims to reduce currency swings by using hedges, so returns reflect more of the local asset performance.
February 17, 2026
A currency-hedged ETF is designed to reduce the impact of exchange-rate movements. For example, a hedged international equity ETF tries to deliver returns closer to the underlying stocks' local-market returns, without as much currency noise.
Hedging isn't free. There can be ongoing costs and the hedge can help or hurt depending on currency moves. Over time, hedging can change the return profile compared with unhedged exposure.
Whether to hedge depends on your goals and time horizon. Some investors hedge to reduce volatility, while others accept currency exposure as part of international diversification.
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