LONDON/NEW YORK (Reuters) – Investors have been piling into currency-hedged equity tracker funds, seeking protection against big moves in foreign exchange rates.
Typically foreign investors buy un-hedged equities since share prices are usually negatively correlated to currencies. In fact, they offer a partial hedge against sharp moves in foreign exchange.
But with most equity markets near record highs and major currencies notching up double-digit gains or losses this year, investors are taking no chances.
Exchange-traded funds trade like stocks but track a wider range of securities more cheaply th…