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New exchange traded products pair foreign stocks with a currency hedge

October 7, 2024, CNBC, Jesse Pound

Three new exchange traded products launched on Monday that could shake up the way investors can gain exposure to international stocks.

Precidian Investments debuted securities that include the American depositary receipt for a foreign stocks, along with a currency hedge. The first three so-called “ADRhedged” products track AstraZeneca, HSBC and Shell, with more products in the pipeline.

“When you buy an ADR, you actually have two investments inside that security: the individual company, and the underlying currency versus the U.S. dollar. … If you don’t want currency risk, we can help you mitigate that,” said Stuart Thomas, founding principal at Precidian.

The new products are listed on Cboe. There are already 65 funds similar to this trading in Canada, with about 6 billion Canadian dollars in assets under management, according to Cboe.

“We look at ADRhedged as another point of innovation on a very tried and true product — the ADR,” said Rob Marrocco, Cboe’s global head of exchange traded product listings.”

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