VOO and SPY and Good, But DBEU Looks A Lot Better Right Now

8 hours ago 1

John Seetoo

Tue, December 16, 2025 astatine 7:10 AM CST 4 min read

Xtrackers MSCI Europe Hedged Equity ETF (DBEU) returned 20.18% year-to-date contempt currency hedging. This outpaced the S&P 500’s 18.7%.
DBEU hedges against six European currencies to trim volatility from dollar fluctuations.
The money yields 2.98% and holds 414 stocks crossed European financials and industrials.
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For investors wishing to mitigate currency fluctuation hazard for European marketplace investments, xTrackers MSCI Europe Hedged Equity ETF (NYSE: DBEU) is 1 of a tiny fewer that acceptable the bill, yet inactive outpaces the Vanguard’ S&P 500 ETF (NYSE: VOO) and State Street’s S&P 500 ETF (NYSE: SPY).

Currency hedging is simply a nonexistent contented for US focused funds, since much than 99% of the time, each of the securities are wholly denominated successful US dollars. European ETFs and CEFs whitethorn not person it arsenic easy. If each of the securities travel from the Eurozone, the likelihood is that the bulk of stocks are successful Euros, with lone UK stocks demonominated successful GBP. (Great Britain Pound Sterling). If the span of sum includes Scandinavian nations oregon Switzerland, past Norwegian oregon Danish Krone, Swedish Krona, and Suisse Francs whitethorn besides request to beryllium hedged against the US dollar for valuation fluctuations.

Surprisingly, the larger European marketplace ETFs similar Vanguard FTSE Europe ETF (VGK) oregon iShares Core MSCI Europe ETF (IEUR) are unhedged. Much of their earlier gains came from earlier successful 2025 erstwhile the US dollar experienced an antithetic 11% downturn earlier climbing backmost up implicit the summertime and fall. It is precise apt that had the dollar not exhibited specified weakness, that the European marketplace ETFs would not person astir delivered the robust 30%+ gains exhibited year-to-date.

US dollars connected the representation of Europe. American concern and trading with EU, continent economy

The antithetic steep driblet of the US dollar earlier successful 2025 triggered the DBEU currency hedge to the payment of its shareholders.

Although unhedged European marketplace ETFs whitethorn boast 30%+ YTD gains for 2025, their intrinsic volatility capableness against the US dollar tin origin immoderate investors galore sleepless nights, particularly fixed the US dollar’s 2025 trading range. Although DBEU deploys a currency hedge protocol, which limits upside with a collar successful speech for curbed volatility, its 20.18% instrumentality YTD inactive outperforms the S&P 500 tracking VOO’s 18.7% and SPY’s 18.6%.

DBEU is simply a passively managed ETF designed to way the MSCI Europe US Dollar Hedged Index. Launched successful October, 2013, its details are arsenic follows: