While hedging mitigates volatility attributable to FX, it actually increases the volatility of income distributions from a fund. It's basically a tax quirk. FX hedges are typically rolling three month FX forward contracts. This can cause a timing mismatch between the gains/losses resulting from the hedges and the gains/losses from the portfolio. The effect is that if a loss is made on an FX hedge, this loss reduces available income that would otherwise be distributable by a fund.
As an example, following are the distributions for the Vanguard Global Infrastructure Index Fund, showing the hedged vs unhedged versions. Note that the hedged version has had frequent instances of zero distributions. Obviously if you were relying on that for income (and that's often why people invest in infrastructure), you'd get a poor outcome.
This is why if you are picking a international fund or ETF and relying on that product for income (as opposed to reinvesting distributions), you need to be careful. If the fund is using TOFA to mitigate it, probably not a problem.
