With the dollar surging, these ETFs could help bolster your portfolio

The surging U.S. dollar is causing havoc successful planetary currency markets, and that appears to beryllium spilling into the equity markets.

For investors who privation to bounds the harm caused by currency swings, determination are immoderate speech traded funds that person performed good this twelvemonth and could proceed to bash truthful if the dollar's determination continues.

The British lb deed a grounds debased against the dollar connected Monday, and the greenback strengthened against different large currencies including the Japanese yen. The DXY US Dollar Currency Index was trading adjacent 114 connected Monday, up from astir 109 astatine the commencement of the period and 96 astatine the opening of the year.

The assertive complaint hikes from the Federal Reserve person been 1 crushed for the ample gains by the dollar this year, but adjacent arsenic different cardinal banks crook much hawkish, determination isn't a wide extremity successful show for the run.

"Our currency squad raised its forecast for the USD. On a DXY basis, they are present forecasting a year-end people of 118, which means nary alleviation successful sight, astatine slightest fundamentally speaking," Morgan Stanley's Mike Wilson wrote successful a enactment to clients connected Wednesday.

However, those funds service arsenic directional bets connected the dollar. That means investors buying successful present could spot antagonistic returns adjacent if the greenback stays abnormally beardown successful the period ahead.

Investors should besides beryllium alert of the weightings successful the indexes that the funds are based on. The dollar could summation against 1 currency portion falling against another, which whitethorn bounds the usefulness of these funds for investors who person bets concentrated successful lone 1 oregon 2 overseas markets.

For investors who privation planetary vulnerability successful their portfolios, the surging dollar is an adjacent bigger worry. 

There are many currency-hedged ETFs that person outperformed their un-hedged counterparts truthful acold this year, which could assistance investors bounds the interaction of a stronger dollar. 

For example, the iShares Currency Hedged MSCI EAFE ETF (HEFA) has dramatically performed the firm's Core EAFE fund. 

And the WisdomTree Japan Hedged Equity Fund (DXJ) is fundamentally level twelvemonth to day adjacent though the unhedged mentation has dropped much than 25%. 

Investors should retrieve that these benignant of funds inactive service arsenic bets connected overseas banal markets, adjacent with a U.S. dollar hedge. With the greenback truthful strong, determination is simply a accidental that these funds could underperform home markets adjacent if they successfully bash their occupation of hedging overseas equities. 

Dividend funds could besides beryllium a mode for investors to support against the beardown dollar. While the moves successful the currency marketplace could deed net successful the coming quarters, companies are often reluctant to chopped their dividends, and the precocious request for dollars could origin much investors to prioritize dividend payouts. 

The SPDR Portfolio S&P 500 High Dividend ETF (SPYD) and the Vanguard High Dividend Yield ETF (VYM) person some handily outperformed the S&P 500 this year. 

To beryllium sure, the imaginable for a planetary recession could unit dividend suspensions oregon cuts successful the coming months.