The exchange-traded fund (ETF) industry has grown into a trillion dollar business since the first ETF was launched 20 years ago. Today's traders and investors have access to a growing number of ETFs, offering exposure to a wide variety of popular and niche markets. One of these is the currency ETF market, providing exposure to both individual as well as baskets of currencies. Here we will take a look at some of the more popular currency ETFs on the market today.
PowerShares DB USD Index Bullish (NYSE: UUP)
The PowerShares DB USD Index Bullish ETF tracks the Deutsche Bank Long US Dollar Futures Index (USDX), designed to replicate the performance of long USD contracts against a basket of the six major world currencies - the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc. UUP, which was launched on Feb. 20, 2007, has an expense ratio of 0.80%, total net assets of $646,286,460, and an average three-month volume of more than 1.1 million.
CurrencyShares Euro Currency Trust (NYSE: FXE)
The CurrencyShares Euro Trust tracks the price of the euro; its holdings consist entirely of the euro. The euro is the currency of 17 European Union (EU) nations and is the second-most traded currency in the world, accounting for just over 39% of global currency transactions. Launched on Dec. 8, 2005, FXE has an expense ratio of 0.40%, total net assets of $225,597,106 and an average three-month volume of more than 500,000.
CurrencyShares Japanese Yen Trust (NYSE: FXY)
The CurrencyShares Japanese Yen Trust tracks the price of the Japanese yen; its holdings consist entirely of this currency. The Japanese yen is the world's third most traded currency, accounting for 19% of worldwide foreign exchange transactions. With an inception date of Feb. 12, 2007, FXY has an expense ratio of 0.40%, total net assets of $174,306,899 and an average three-month volume of over 400,000.
CurrencyShares Australian Dollar Trust (FXA)
The CurrencyShares Australian Dollar Trust was designed to track the price of the Australian dollar; its holdings consist entirely of the Australian dollar. The Australian dollar ranks as the world's fifth most traded currency, accounting for 7.6% of foreign exchange transactions worldwide. The fund, which was launched on June 21, 2006, has an expense ratio of 0.40%, total net assets of $624,071,328 and an average three-month volume of 157,143.
Other Currency ETFs
The table below lists the 24 non-leveraged currency ETFs that are currently available to investors and traders. They are listed in order of expense ratio, from lowest to highest.
|FXA||CurrencyShares Australian Dollar Trust||AUD||0.40%|
|ERO||Barclays PLC iPath EUR/USD Exchange Rate ETN||EUR||0.40%|
|FXS||CurrencyShares Swedish Krona Trust||SEK||0.40%|
|FXB||CurrencyShares British Pound Sterling Trust||GBP||0.40%|
|FXCH||CurrencyShares Chinese Renminbi Trust||RMB||0.40%|
|GBB||iPath Goldman Sachs iPath GBP/USD Exchange Rate ETN||GBP||0.40%|
|FXE||CurrencyShares Euro Currency Trust||EUR||0.40%|
|FXC||CurrencyShares Canadian Dollar Trust||CAD||0.40%|
|FXF||CurrencyShares Swiss Franc Trust||CHF||0.40%|
|JYN||BARCLAYS BANK PLC iPath JPY/USD Exchange Rate ETN||JPY||0.40%|
|FXY||CurrencyShares Japanese Yen Trust||JPY||0.40%|
|BZF||WisdomTree Dreyfus ETF BZ Real FndFund||BRL||0.45%|
|ICN|| WisdomTree Dreyfus Indian Rupee Fund ETF
|CYB||WisdomTree Dreyfus Chinese Yuan FdFund||RMB||0.45%|
|CEW||WisdomTree Dreyfus Emerging Currency Fund||Emerging Markets||0.55%|
|CCX||Wisdomtree Commodity Currency Fund||Diversified||0.55%|
|CNY||Market Vectors-Chinese Renminbi/USD ETN||RMB||0.55%|
|INR||Market Vectors-Indian Rupee/USD ETN||INR||0.55%|
|ICI||iPath Optimized Currency Carry ETN||Diversified||0.65%|
|UUP||PowerShares DB USD Index Bullish||USD||0.80%|
|DBV||PowerShares DB G10 Currency Harvest||Diversified||0.81%|
|JEM||iPath GEMS Index ETN||Diversified||0.89%|
|AYT||iPath GEMS Asia 8 ETN||Diversified||0.89%|
|PGD||iPath Asian & Gulf Currency Revaluation ETN||Diversified||0.89%|
Today's currency exchange-traded funds, listed in order of expense ratio from lowest to highest.
The Bottom Line
The foreign exchange markets boast more than $4 trillion in average daily trading volume, which makes it the largest financial market in the world. Currency ETFs provide investors with exposure to a particular currency or a basket of currencies, which allows access to multiple foreign currencies. Today there are 24 currency ETFs on the market, and it is important to note that some are very thinly traded. The four funds highlighted here are the ones that are the most actively traded. As with any investment, it is important to perform appropriate research prior to making any investment decisions.