Precidian Investments: A New Era for ADR Investments with Currency Protection

Precidian Investments has introduced an innovative way for US investors to invest in foreign stocks while minimizing currency risks. The developer of Exchange Traded Funds (ETFs) announced that it will list hedged American Depositary Receipts (ADRs) on the Cboe U.S. exchange platform. Typically, investors purchasing ADRs are exposed to fluctuations between the US dollar and the respective foreign currency. However, by combining ADRs with currency hedging within a single security, investors can now significantly mitigate these risks, according to Cboe. The Canadian Imperial Bank of Commerce will provide the currency hedging as the counterparty. Rob Marrocco of Cboe describes the new product, called ADRhedged, as the next generation of ADRs for US investors. At launch, Cboe will list ADRhedged securities for AstraZeneca, HSBC Holdings, and Shell, with an additional 14 company listings expected shortly. Stuart Thomas, co-founder of Precidian, stated that the over $1 trillion ADR market has been waiting for a hedged alternative for decades. The introduction of these hedged products comes at a time when the US dollar has significantly appreciated against most global currencies over the past decade, causing ADR investments to underperform in dollar valuation. Thomas emphasized that the new hedging solution offers US investors an important addition to their investment strategies.