iShares has filed paperwork with the SEC for a “iShares Australian Dollar Cash Rate Fund.” The iShares Australian Dollar Cash Rate Fund (the “Fund”) seeks to provide its shareholders a daily return that reflects: (i) the increase or decrease in the exchange rate of the Australian dollar against the United States dollar and (ii) the yield of the Australian dollar, minus the Fund’s fees and expenses. The Fund also seeks to preserve liquidity, and maintain stability of principal and preserve capital, each as measured in Australian dollars.
Principal Investment Strategies
The Fund is an actively managed exchange-traded fund (“ETF”) that seeks to achieve its investment objective by investing, under normal circumstances, substantially all of its assets in short-term securities denominated in United States dollars and spot foreign exchange currency contracts (generally required to be settled within two business days) to purchase the Australian dollar (against delivery of the United States dollar). The strategy of combining investments in short-term fixed income securities and spot foreign exchange currency contracts is designed to provide financial exposure substantially similar to a purchase of the Australian dollar reflecting: (i) the increase or decrease in the exchange rate of the Australian dollar against the United States dollar and (ii) the yield of the Australian dollar, minus the Fund’s fees and expenses.
The Fund invests in United States dollar denominated short-term securities of varying maturities and spot foreign exchange currency contracts in order to seek to replicate the daily return of the Australian dollar. The short-term securities held by the Fund generally will consist of high quality debt obligations and may include, but are not limited to, obligations issued by the U.S. government and its agencies and instrumentalities, municipal variable rate demand notes, corporate and commercial debt instruments, and bank notes and similar demand deposits. The Fund’s assets also may be invested in short-term debt instruments and bank notes and similar demand deposits denominated in the Australian dollar from time to time when BFA believes these securities may help the Fund achieve its investment objective. All short-term debt securities acquired by the Fund will be rated investment grade by at least one nationally recognized statistical rating organization (NRSRO) or, if unrated, deemed by BFA to be of equivalent quality. The Fund may also invest its assets in money market funds (including funds that are managed by BFA or one of its affiliates), cash and cash equivalents.
The Fund generally will maintain a weighted average portfolio maturity of between 1 and 30 days and generally will be limited to investments with remaining maturities of 60 days or less. The Fund will not purchase any security with a remaining maturity of more than 397 calendar days.
For the complete filing click: HERE