The U.S. Dollar Weakness Has Investors Looking To Hedge With Currency ETF’s

foreign world markets“The assault on the U.S. dollar has investors looking to hedge exposure to further weakening in the world’s reserve currency, and some are turning to exchange-traded funds for support. Most individual investors should leave currency trading to speculators, but extremely modest allocations to foreign currencies can act as a hedge for dollar-denominated stocks, bonds and other assets. Currency exchange-traded funds are just one way to play the dollar’s weakness. Investors can also tap ETFs tracking foreign stocks, commodities, inflation-protected bonds and gold,” John Spence Reports From The WSJ.

Spence Continues writing that “Providers of currency ETFs include Rydex Investments, WisdomTree Investments and Invesco PowerShares. Barclays PLC (BCS) issues a family of currency ETNs, while ProShares offers leveraged and inverse currency ETFs that let investors make magnified bets on market movements.”

Here is a list of some of the currency ETF’s John Spence goes into detail about:

CurrencyShares
Rydex’s lineup of currency ETFs includes several funds with total assets in the range of $500 million, such as CurrencyShares Euro Trust (FXE), CurrencyShares Australian Dollar Trust (FXA), CurrencyShares Canadian Dollar Trust (FXC) and CurrencyShares Japanese Yen Trust (FXY).

WisdomTree
ETF manager WisdomTree oversees several currency ETFs, including WisdomTree Dreyfus Chinese Yuan Fund (CYB), WisdomTree Dreyfus Brazilian Real Fund (BZF) and WisdomTree Dreyfus Emerging Currency Fund (CEW).

PowerShares, Barclays, ProShares
Invesco PowerShares manages a trio of currency products: PowerShares DB G10 Currency Harvest Fund (DBV), PowerShares DB US Dollar Bearish Fund (UDN) and PowerShares DB US Dollar Bullish Fund (UUP).

See The Full Article By John Spence: HERE

 

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.

Chart for PowerShares DB US Dollar Index Bullish (UUP)

The (UDN) investment 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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