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Definition of 'Currency ETF'
Exchange-traded funds (ETFs) invested in a single currency or basket of currencies. Currency ETFs aim to replicate movements in currency in the foreign exchange market by holding currencies either directly or through currency-denominated short-term debt instruments.
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Investopedia explains 'Currency ETF'
Currency ETFs are widely used by investors who wish to gain exposure to the foreign exchange market and would prefer not to enter the futures or forex markets. With the growing popularity of ETFs, investors have found it very easy and relatively inexpensive to trade currency ETFs in order to take advantage of fluctuations between currencies. Currency ETFs can be purchased to track most international currencies including the U.S. and Canadian dollars, the Euro, British pound and Japanese yen.
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Reduce your stock portfolio's risk by trading with foreign currencies.
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Currency moves are unpredictable and can have an adverse effect on portfolio returns. Find out how to protect yourself.
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There's always a bull market somewhere - and now you can find it with currency ETFs.
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To take full advantage of these vehicles, you need to know how they can fulfill certain strategies.
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Diversifying can mean not only investing in various asset classes but also venturing beyond domestic exchanges.
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