Surge in Popularity of Currency-Hedged ETFs Amidst Exchange Rate Fluctuations
Amid the fluctuating exchange rates, currency-hedged ETF products are gaining traction among investors in the U.S. stock market. Samsung Asset Management's KODEX S&P500(H) and KODEX Nasdaq100(H) ETFs have surpassed a combined net asset value of 1 trillion KRW. This milestone is largely due to their value as an alternative that mitigates foreign exchange risks, especially against the backdrop of increased volatility in the dollar-won exchange rate.
These ETFs achieved significant growth within 2 years and 4 months of being listed, with net assets rising by approximately 59.9% this year alone. Individual investor net purchases have reached about 101.7 billion KRW, underscoring their appeal as an attractive investment option for medium- to long-term investors seeking to avoid currency risk.
In a situation where the dollar had maintained strength but is experiencing increased volatility, currency-hedged ETFs offer a way to effectively offset general exchange rate risks. The recent depreciation of the dollar-won exchange rate has positively influenced this trend, serving as a strategy to minimize risks associated with conventional currency-dependent investment methods.
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