Dodging the Dollar Drag: Currency-Hedged Funds Are Booming

April 23, 2015 7:41 PM

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For someone sitting in a Barcelona cafe, the answer is obviously up. Spanish stocks have climbed 10.9 percent in euros. But for someone counting in U.S. dollars, each of those euros is worth less than at the start of the year, so the same MSCI Spain index is down 1.7 percent in dollar terms.

Such is the conundrum for U.S. investors looking at markets around the world. The dollar's value has climbed against the Argentine peso, the New Zealand dollar and almost everything in between. It hit its highest level against the euro last month in more than a dozen years. That has eroded returns f...

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