Net Assets In The Bullish Dollar ETF Have Grown Substantially In 2009

dollar-up“The dollar has slid rapidly in recent months, but don’t tell that to investors in the PowerShares DB US Dollar Bullish ETF (UUP). While a weakening U.S. dollar¬†has helped to usher many investors into gold ETF funds, like bullion-backed SPDR Gold Shares(GLD) and inflation-protection ETFs like iShares TIPs(TIP), a surprising number of investors are using ETFs to make bullish bets on the buck,” Don Dion Reports From The Street.

“In November, $700 million in assets flowed into (UUP), a fund whose size and trading volume far outstrip that of its peer — PowerShares DB US Dollar Bearish ETF (UDN). You would think that a continuing decline in the dollar, which began its slide in 2000, would urge investors to load up on the bearish (UDN) and shun the bullish (UUP). The opposite, however, has occurred,” Dion Reports.

“Despite a declining dollar in 2009, investors have utilized the bullish dollar bet far more than the bearish dollar bet. Year to date, net assets in UUP have grown by $1.1 billion, while net assets in UDN have only increased by $185 million. UUP currently has total assets of $1.7 billion and a three-month average daily trading volume of 4 million shares. UDN has total assets of $382 million and an average daily trading volume of 430 million shares,” Dion Reports.

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The investment (UUP) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Long US Dollar Futures index. The index is comprised solely of long futures contracts. The futures contract is designed to replicate the performance of being long the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

The investment (UDN) seeks to track the price and yield performance, before fees and expenses, of the Deutsche Bank Short US Dollar Futures index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Chart for PowerShares DB US Dollar Index Bearish (UDN)

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