DBEM offers an alternative take on the emerging markets theme, hedging its exposure against local currency movements. The fund's portfolio is based on the MSCI Emerging Markets Index by holding its securities and overlay that position with currency contracts to hedge out its currency exposure to the US dollar. The index is 100% hedged by selling each foreign currency forward at the one-month forward weight, whose amount is kept constant during the period. The index is rebalanced monthly on the last trading day, to take into account the effect of the rolling one-month forward contracts.
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