SIX Currency Hedged Indices

The SIX Currency hedged Indices address the needs of investors who wish to replicate the returns of foreign currency denominated investment instruments in their own reference currency, i.e. without incurring the currency risk. For instance, if the investor’s reference currency is Euro, a portfolio denominated in CHF can be fully hedged in EUR to deliver the underlying returns in Euro and unaffected by the Euro-Swiss Franc exchange rate. This means that FX fluctuations do generally not affect the benchmark returns. The underlying assets’ risk and return remain therefore the main driver of performance for the investor with the reference currency in the hedged currency.

The hedging of the underlying index is performed via one month currency forwards. This means that an amount equivalent to the value of underlying assets in their foreign currency is sold at the one-month forward rate against the hedged currency (typically, the investor’s home currency).