--- title: "Global Stocks, American Dollars: How ADRhedged™ ETFs Are Fixing the Most Overlooked Risk in International Investing" type: "News" locale: "en" url: "https://longbridge.com/en/news/286777327.md" description: "ADRhedged™ ETFs are designed to mitigate the hidden currency risks faced by American investors in international stocks. These ETFs, such as Toyota Motor Corporation ADRhedged™ and Shell ADRhedged™, address the impact of currency fluctuations on returns, which can account for significant volatility. Historical data shows that currency-hedged investments outperform unhedged ones, with a cumulative outperformance of nearly 45% over the past decade. The early performance of ADRhedged™ ETFs, like Arm Holdings PLC ADRhedged™, has demonstrated this potential in real market conditions." datetime: "2026-05-18T13:00:00.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/286777327.md) - [en](https://longbridge.com/en/news/286777327.md) - [zh-HK](https://longbridge.com/zh-HK/news/286777327.md) --- # Global Stocks, American Dollars: How ADRhedged™ ETFs Are Fixing the Most Overlooked Risk in International Investing ## **The Hidden Tax on Your International Portfolio** When an American investor buys shares of Toyota Motor Corporation (TM), Shell (SHEL), or ASML Holding (ASML) on a U.S. exchange, they typically believe they own the company's stock performance — and nothing more. That belief, widespread and deeply intuitive, is wrong in a way that has cost investors real money across every major market cycle of the past decade. ADRhedged™ ETFs — including the Toyota Motor Corporation ADRhedged™ (TMH), Shell ADRhedged™ (SHEH), and ASML Holding NV ADRhedged™ (ASMH) — were built specifically to address that gap. ### Claim 55% Off TipRanks - Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions - Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks American Depositary Receipts — the instruments through which U.S. investors access most internationally-listed companies — carry two distinct sources of return. The first is the performance of the underlying company's stock on its home exchange. The second is the movement of the underlying foreign currency against the U.S. dollar. In years when the euro, British pound, or Japanese yen strengthen against the dollar, that currency tailwind can boost ADR returns beyond what the company itself earned. In years when those currencies weaken — as has been the persistent trend for much of the past decade — investors absorb currency losses that have nothing to do with whether Toyota sold more vehicles or whether Shell pumped more oil. Currency movements can account for up to 40% of total return volatility in international equities.¹ In adverse years, currency depreciation alone can reduce ADR returns by 8% or more compared to the same company's local-currency performance.¹ Across nearly $1 trillion of U.S. capital currently invested in ADRs, that is not a rounding error.² It is a structural drag that most investors are paying without realizing it — and without any mechanism to turn it off. ¹ Source: MSCI, "Global Investing: The Importance of Currency Returns and Currency Hedging"; BIS Triennial Central Bank Survey, April 2025; WisdomTree/MSCI EAFE Index analysis; Bloomberg. ² Source: ADRhedged, as of March 2026. Market estimates based on publicly available ADR market data. ## **What a Decade of Data Shows** The most compelling argument for currency hedging in international portfolios isn't theoretical — it's historical. The MSCI ACWI ex USA Index, which captures large- and mid-cap stocks across developed and emerging markets outside the United States, is the standard benchmark for unhedged international equity exposure. Its currency-hedged equivalent — the MSCI ACWI ex USA 100% Hedged to USD Index — tracks the same basket of companies but neutralizes the effect of currency fluctuations using financial instruments. Over the ten-year period from January 2015 through February 2025, the currency-hedged index outperformed the unhedged version by approximately 2.42% per year on an annualized basis.³ Compounded over a decade, that gap widened to a cumulative outperformance of nearly 45%.³ Same companies. Same geographies. Meaningfully different outcomes — driven entirely by whether or not the investor carried unmanaged FX exposure. To make this concrete, consider HSBC Holdings (HSBC) — Europe's largest bank by assets and one of the most widely held international stocks among U.S. investors. HSBC's ADR trades in U.S. dollars on American exchanges, but its value is linked to two things: the performance of its shares on the London Stock Exchange, priced in British pounds, and the movement of the pound against the dollar. If HSBC's London shares rise 10% in a given year but sterling weakens 6% against the dollar over the same period, a U.S. investor holding the unhedged ADR captures roughly 4% — not 10%. That 6-percentage-point gap disappeared not because HSBC underperformed as a business, but because the investor unknowingly held a currency position they never asked for. The same dynamic plays out for holders of Novo Nordisk (NVO), SAP (SAP), and Arm Holdings (ARM) — any global company whose local shares are priced in a currency other than the dollar. ADRhedged™ ETFs offer hedged versions of each: the HSBC Holdings ADRhedged™ (HSBH), Novo Nordisk A/S ADRhedged™ (NVOH), SAP SE ADRhedged™ (SAPH), and Arm Holdings PLC ADRhedged™ (ARMH). ³ Source: MSCI data, as of February 28, 2025. Past performance does not guarantee future results. ## **When the Hedge Does the Work: A Performance Snapshot** The early performance record of ADRhedged™ ETFs has illustrated this thesis in live market conditions — and in at least one case, dramatically so. **Arm Holdings PLC ADRhedged™ (ARMH)**, which launched in March 2025, posted a total return of approximately 53.72% in its first year of trading, including dividends.⁴ In March 2026 alone — a month when the Technology ETF category averaged a loss of approximately -4.9% — ARMH returned roughly 20.6%, earning it a top-decile grade within its peer category.⁴ The driver was straightforward: while most technology ETFs were dragged lower by broad market pressure, ARMH's currency hedge stripped out the pound/dollar noise, delivering a return that more closely tracked Arm's underlying local-market performance rather than the compounded effect of Arm's stock plus sterling volatility. Among London-listed names — where the British pound has served as a persistent headwind for unhedged U.S. investors in recent years — the hedged ETFs covering HSBC Holdings ADRhedged™ (HSBH) and Shell ADRhedged™ (SHEH) have also outperformed their unhedged ADR equivalents since inception, precisely during the period when currency was working against the unhedged investor.⁵ _For standardized performance current to the most recent month-end, visit adrhedged.com or call (844) 954-5333. Past performance does not guarantee future results._ ⁴ Source: StockAnalysis.com; AAII/Morningstar, as of March 2026. Past performance does not guarantee future results. ⁵ Source: ADRhedged / Bloomberg, as of inception dates through most recent available data. Past performance does not guarantee future results. For standardized performance, please see adrhedged.com. _Holdings are subject to change. For the complete current product lineup, visit adrhedged.com/directory._ ## **A Solution Built for Every Investor** Until recently, currency hedging for individual international positions was a tool available almost exclusively to hedge funds and institutional investors with access to sophisticated FX derivatives markets. Retail investors and most financial advisors had no practical way to hedge the currency component of a single-stock ADR position without introducing complexity, cost, and operational burden that made it effectively inaccessible. ADRhedged™ ETFs — a suite of single-stock ETFs developed by Precidian Investments and available through ADRhedged™ LLC — are designed to change that. Each ADRhedged™ ETF holds the ADR of a specific company alongside a dynamic currency hedge that seeks to neutralize the day-to-day fluctuation between the U.S. dollar and the company's local currency. Investors buy and sell the ETF on U.S. exchanges like any other stock or fund — at a 0.19% annual fee per ETF, with no futures markets, no margin accounts, and no foreign brokerage relationships required. The currently available lineup spans ten world-class international companies across sectors and geographies: Arm Holdings PLC ADRhedged™ (ARMH), ASML Holding NV ADRhedged™ (ASMH), Shell ADRhedged™ (SHEH), HSBC Holdings ADRhedged™ (HSBH), Novo Nordisk A/S ADRhedged™ (NVOH), SAP SE ADRhedged™ (SAPH), Toyota Motor Corporation ADRhedged™ (TMH), BP p.l.c. ADRhedged™ (BPH), GSK plc ADRhedged™ (GSKH), and STMicroelectronics NV ADRhedged™ (STHH) — each tracking one company's local equity return with the currency noise removed. A substantial pipeline of additional products covering LVMH (LVH), Taiwan Semiconductor (TSMH), Airbus (EADH), and more than 30 other global names is already registered and awaiting launch. ## **Why This Moment May Matter More Than Usual** The macroeconomic backdrop adds a layer of urgency to this structural argument. The U.S. dollar has remained broadly strong against major trading-partner currencies, driven by persistent interest rate differentials, safe-haven demand, and ongoing global economic uncertainty. The currencies underlying most major ADRs — the euro, British pound, yen, and Swiss franc — have all faced meaningful depreciation pressure against the dollar in recent years. For investors holding unhedged ADRs during this period, that currency headwind has been a quiet but consistent drag on realized returns — visible in the gap between how a company's stock performed on its home exchange and what showed up in an American brokerage account. Looking ahead, interest rate differentials, inflation trajectories, and monetary policy divergence between the Federal Reserve and major foreign central banks suggest that currency volatility is likely to remain elevated. Whether the dollar strengthens further or eventually reverses, currency hedging offers a way to reduce the degree to which international equity returns are determined by FX outcomes rather than company fundamentals. ## **The Bottom Line** For the past decade, most retail investors holding international stocks through ADRs have unknowingly carried a currency exposure they never asked for, never analyzed, and were never compensated to hold. The MSCI data shows the cumulative cost of that unhedged exposure has been substantial — nearly 45% in cumulative underperformance relative to the currency-hedged benchmark over ten years. For investors who own Toyota (TM) because they want Toyota, who own Shell (SHEL) because they want Shell, and who own ASML (ASML) because they want ASML — ADRhedged™ ETFs offer a way to hold those positions without also holding an unmanaged bet on the direction of the yen, the pound, and the euro. Whether this strategy makes sense for any individual investor depends on their financial situation, time horizon, existing international exposure, and view on currency markets. Investors considering ADRhedged™ ETFs should review the prospectus carefully and consult with a qualified financial advisor before making any investment decisions. _For standardized performance current to the most recent month-end, visit adrhedged.com or call (844) 954-5333._ * * * ## **Disclosures** _This article is sponsored content created in partnership with ADRhedged™ LLC. It is intended for informational and educational purposes only and does not constitute investment advice, a recommendation, or a solicitation to buy or sell any securities. Investors should consider their own financial situation, risk tolerance, and investment objectives before making any investment decisions. Investing involves risk, including the possible loss of principal._ **Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call (844) 954-5333 or visit our website at** **www.adrhedged.com****. Read the prospectus or summary prospectus carefully before investing. As with any investment, you could lose all or part of your investment in the Series, and the Series performance could trail that of other investments.** _The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling (844) 954-5333. Short-term performance, in particular, is not a good indication of the fund's future performance, and an investment should not be made based solely on returns._ **Market Risk.** The prices of the securities in the Series are subject to the risk associated with investing in the stock market, including sudden and unpredictable drops in value. An investment in the Series may lose money. **Currency Hedging Risk.** Because changes in foreign currency exchange rates affect the value of ADRs, the Series enters into the Currency Hedge Contract in order to seek to minimize the impact of fluctuations in the exchange rate between the U.S. dollar and the Local Currency. While this approach is designed to minimize the impact of currency fluctuations on Series returns, it does not necessarily eliminate the Series' exposure to the Local Currency. Currency hedges are sometimes subject to imperfect matching between the Currency Hedge Contract and the currencies that the contract intends to hedge, and there can be no assurance that the Currency Hedge Contract will be effective. **Currency Swap Risk.** The Currency Hedge Contract is subject to market risk, risk of default by the other party to the transaction (counterparty risk), and risk of imperfect correlation between profit or loss on the Currency Hedge Contract and the underlying currency exchange rate. **Issuer Concentration Risk.** Because the Series only invests in the ADRs of the Company and the Currency Hedge Contract, the Series may be adversely affected by the performance of the Company, subject to increased price volatility and more susceptible to adverse economic, market, political or regulatory occurrences affecting the Company or industry. **Foreign Market Risk.** Because non-U.S. exchanges may be open on days when the Series does not price its Shares, the value of the underlying securities of the ADRs in the Series portfolio may change on days when Shareholders will not be able to purchase or sell the Series Shares, regardless of whether there is an active U.S. market for Shares. **Non-Diversification Risk.** The Series is non-diversified and holds Portfolio Securities of only one particular issuer. As a result, the Series may have greater volatility than other diversified funds. **Management Risk.** The Series is subject to the risk that the Manager's investment management strategy may not produce the intended results. **New Series Risk.** As of the date of this prospectus, the Series has no operating history and currently has fewer assets than larger funds. Like other new funds, large inflows and outflows may impact the Series market exposure for limited periods of time. _Distributor: Foreside Fund Services, LLC._ _For full fund details, prospectus, and holdings, visit adrhedged.com._ ### Related Stocks - [UUP.US](https://longbridge.com/en/quote/UUP.US.md) - [USDU.US](https://longbridge.com/en/quote/USDU.US.md) - [SHEH.US](https://longbridge.com/en/quote/SHEH.US.md) - [TM.US](https://longbridge.com/en/quote/TM.US.md) - [7203.JP](https://longbridge.com/en/quote/7203.JP.md) - [SHEL.US](https://longbridge.com/en/quote/SHEL.US.md) - [ASML.US](https://longbridge.com/en/quote/ASML.US.md) - [TMH.US](https://longbridge.com/en/quote/TMH.US.md) - [ASMH.US](https://longbridge.com/en/quote/ASMH.US.md) - [HSBC.US](https://longbridge.com/en/quote/HSBC.US.md) - [00005.HK](https://longbridge.com/en/quote/00005.HK.md) - [NVO.US](https://longbridge.com/en/quote/NVO.US.md) - [SAP.US](https://longbridge.com/en/quote/SAP.US.md) - [SAP.DE](https://longbridge.com/en/quote/SAP.DE.md) - [ARM.US](https://longbridge.com/en/quote/ARM.US.md) - [HSBH.US](https://longbridge.com/en/quote/HSBH.US.md) - [NVOH.US](https://longbridge.com/en/quote/NVOH.US.md) - [SAPH.US](https://longbridge.com/en/quote/SAPH.US.md) - [ARMH.US](https://longbridge.com/en/quote/ARMH.US.md) - [TOYOF.US](https://longbridge.com/en/quote/TOYOF.US.md) - [SHEL.WI.US](https://longbridge.com/en/quote/SHEL.WI.US.md) - [DTIW.SG](https://longbridge.com/en/quote/DTIW.SG.md) - [HSBA.UK](https://longbridge.com/en/quote/HSBA.UK.md) ## Related News & Research - [Universal Digital Inc. 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