Currency ETF Funds

Currency ETF Funds

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Currency ETF Funds

Currency ETF Funds: The ETF is an Exchange Traded Fund which is very similar to a Mutual Fund, but it has very little management. Currency Exchange-Traded Funds (ETFs) are very similar to the Commodity ETFs which hold Currency rather than companies like traditional ETFs.

Foreign Exchange rates refer to the price at which a currency can be exchanged for another. The exchange rate will increase or decrease as the value of each currency fluctuates against another. Factors which may also affect the value of a currency include economic growth, levels of debt; the other factors include oil and gold prices.

Currency ETFs replicate the actions of the currency in the exchange market by either holding currency cash deposits in the currency monitoring or the use of futures contracts on currencies.

There are many International ETFs that investors can choose to take advantage of the weak dollar. It is about finding the right one according to their portfolios and their investment objectives. Investors can also use currency ETFs in their portfolio. Although they are relatively new, the range is growing.

Currency ETFs involve certain risks. The main risk is that the global currency exchange market is very volatile and may fluctuate dramatically.

The currency ETFs that invest in the Euro area are considered the safest. The Euro has continued to remain strong while the United States, Japan and China have suffered slow down. The euro was stronger against the dollar since its introduction, and this trend is likely to continue.

The following are few Currency ETFs and ETNs:

PowerShares DB G10 Currency Harvest Fund (DBV) : Seeks to track the Deutsche Bank G10 Currency Future Harvest Index by
a) Entering into long futures contracts on the three G10 currencies associated with the highest interest rates
b) Entering into short futures contracts on the three G10 currencies associated with the lowest interest rates, and
c) Collateralizing the futures contracts with United States 3-month Treasury bills.

ProShares Ultra Euro ETF (ULE) : The ProShares Ultra Euro ETF seeks daily investment results that correspond to twice the performance of the Euro as measured in U.S. dollars.

WisdomTree Dreyfus Brazilian Real Fund (BZF) : WisdomTree's Dreyfus Brazilian Real Fund seeks to earn current income reflecting money market rates in Brazil, as well as provide exposure to the movement of the Brazilian Real relative to the U.S. Dollar

WisdomTree Dreyfus Emerging Currency Fund - Active (CEW) : WisdomTree's Dreyfus Emerging Currency Fund is an actively managed ETF that seeks to provide a liquid, broad-based exposure to money market rates and currency movements within emerging market countries. The Fund uses investments in high-quality U.S. money market investments & currency contracts to achieve a risk-return exposure similar to money market instruments denominated in the specified emerging currencies.

CurrencyShares Australian Dollar Trust ETF (FXA) : The CurrencyShares Australian Dollar Trust is designed to track the price of the Australian Dollar net of Trust expenses, which are expected to be paid from interest earned on the deposited Australian Dollars.

CurrencyShares Euro Trust ETF (FXE) : The CurrencyShares Euro Trust is designed to track the price of the euro net of Trust expenses, which are expected to be paid from interest earned on the deposited euros.

Market Vectors Indian Rupee/USD ETN (INR) : The Market Vectors-Indian Rupee/USD Exchange-Traded Note is designed to reproduce the performance of the S&P Indian Rupee Total Return Index.

ProShares UltraShort Euro ETF (EUO) : The ProShares UltraShort Euro ETF seeks daily investment results that correspond to twice the inverse (opposite) of the performance of the performance of the Euro as measured in U.S. dollars.