(Pictured: Amanda Skelly)
State Street Global Advisors has followed up its global equities ETF, based on the S&P World ex-Australia index, with a currency hedged version which commenced trading last week.
The SPDR S&P World ex-Australia fund was launched in March, marking SSgA’s first international ETF for the local market. Last year the manager launched a bond ETF but prior to that offered only an Australian equities and a REITS fund. Nevertheless, SSgA remains the largest provider of ETFs in Australia in terms of volume of trading.
Amanda Skelly, SSgA’s head of SPDR ETFs in Australia, said the hedged global ETF reflected investor demand for access to the same selection of international companies while minimising the impact of currency changes on the value of their investment.
“There is certainly a loud and ongoing debate about the direction of the Australian dollar,” she said. “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.”
Skelly said that everyone seemed to have a view on the Aussie dollar, given the dramatic decline of about 12 per cent in the past two months.
“We are simply providing the market with another tool,” she said. “We pride ourselves on building local solutions. Everything we have done here is designed for Australian investors. We want to continue to do that.”
Skelly said that, generally speaking, SSgA clients have had a hedge in place of between 20-40 per cent for all international exposures, although this had come down a little recently. The firm runs a dynamic hedge.
“Other feedback we received included that a lot of investors had been burned by the dollar and don’t want that to happen again.”