Currency-hedged ETFs have attracted all sorts of attention this year. Not iPhone-level buzz. but they are increasingly popular, so you might be thinking of buying one. And soon you’ll have more choices, with ETF giant BlackRock /quotes/zigman/249424 /quotes/nls/blk BLK planning new products.

The greater interest in currency-hedged ETFs has to do with a more bullish outlook for the dollar, according to Deutsche Bank’s Martin Kremenstein.

“You’re definitely seeing investment advisers become much more aware of the currency risk that they’re running,” he told MarketWatch. Kremenstein heads up Deutsche Bank’s passive asset management business in the Americas, including currency-hedged ETFs like the DB X-trackers MSCI Japan Hedged Equity Fund /quotes/zigman/5375568 /quotes/nls/dbjp DBJP and the DB X-trackers MSCI Germany Hedged Equity Fund /quotes/zigman/5375554 /quotes/nls/dbgr DBGR .

“For the last 10 years, up until about a year ago, it was basically a free ride. The dollar was declining. You essentially always came out ahead out by not hedging. That paradigm has now ended.”

His company, the fifth-largest ETFs manager globally, is facing new competition in currency-hedged products from No. 1 ETFs manager BlackRock, the parent of iShares. Earlier this month, BlackRock disclosed plans for three new funds: the iShares Currency Hedged MSCI Japan ETF, iShares Currency Hedged MSCI Germany ETF and iShares Currency Hedged MSCI EAFE ETF. IndexUniverse said currency-hedged ETFs have become all the rage in about the past year ” as it reported on the iShares move.

In another sign of how currency-hedged ETFs are in vogue, the WisdomTree Japan Hedged Equity Fund /quotes/zigman/1496633 /quotes/nls/dxj DXJ is the most popular U.S. ETF this year in terms of net inflows, according to IndexUniverse data. DXJ has advanced nearly 51% in the past 12 months, while an unhedged rival fund from BlackRock, the iShares MSCI Japan ETF /quotes/zigman/260387 /quotes/nls/ewj EWJ. is up just 28%, as the dollar has climbed vs. the yen. DBJP, while far behind EWJ and DXJ in terms of assets, is up even more with a gain of almost 60%.

“If investors are currently investing internationally, they are making a short bet on the U.S. dollar through that investment,” Kremenstein said. “If that isn’t exactly what they want to do, then they should consider using a currency-hedged product, either on its own or in conjunction with an unhedged product.”

Deutsche Bank went over its relatively upbeat outlook on the dollar in a recent note that featured the chart above. While American tourists should rejoice, a strengthening dollar will cut into returns for Americans investing in non-U.S. equities, the note says.

On Friday, the dollar was on track for its second straight weekly loss. But over the past 12 months, the ICE dollar index /quotes/zigman/1652083 DXY. which tracks the buck against a basket of six rival currencies, is up 1.3%. While the Federal Reserve surprised markets Wednesday by not tapering its monetary stimulus, or money printing, the U.S. central bank is still expected to taper by year’s end, helping to support the dollar.

Victor Reklaitis

Follow Vic on Twitter @vicrek