Currency ETF

AAA

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.

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.

VIDEO

Loading the player...
RELATED TERMS
  1. Double Gold ETF

    An exchange traded fund that tracks the value of gold and responds ...
  2. Stock ETF

    A security that tracks a particular set of equities, similar ...
  3. IPO ETF

    An exchange-traded fund that focuses on stocks that have recently ...
  4. Euro ETF

    An exchange-traded fund that invests in the euro currency, either ...
  5. Currency Carry Trade

    A strategy in which an investor sells a certain currency with ...
  6. Exchange-Traded Fund - ETF

    A security that tracks an index, a commodity or a basket of assets ...
Related Articles
  1. Mutual Funds & ETFs

    4 Ways To Use ETFs In Your Portfolio

    To take full advantage of these vehicles, you need to know how they can fulfill certain strategies.
  2. Mutual Funds & ETFs

    Hedge Against Exchange Rate Risk With Currency ETFs

    Currency moves are unpredictable and can have an adverse effect on portfolio returns. Find out how to protect yourself.
  3. Mutual Funds & ETFs

    Getting Into International Investing

    Diversifying can mean not only investing in various asset classes but also venturing beyond domestic exchanges.
  4. Options & Futures

    Currency ETFs Simplify Forex Trades

    Reduce your stock portfolio's risk by trading with foreign currencies.
  5. Mutual Funds & ETFs

    Profit From Forex With Currency ETFs

    There's always a bull market somewhere - and now you can find it with currency ETFs.
  6. Mutual Funds & ETFs

    The Impact of the Janus Market Timing Ruling

    A look at the impact of the Janus Supreme Court ruling on market timing.
  7. Mutual Funds & ETFs

    These 4 Precious Metals ETFs Help Combat Inflation

    A look at 4 precious metal ETFs to combat inflation when it hits.
  8. Mutual Funds & ETFs

    Preferred Stock ETFs: Are They Right for You?

    Considering preferred stock ETFs? Here's a look at their pros and cons.
  9. Mutual Funds & ETFs

    ETF Fees: What You Should Know

    A look at how ETF Fees work.
  10. Mutual Funds & ETFs

    ETFs Characteristics for Short-Term Trading

    Not all ETFs fit the short-term trading scenario. Investopedia tells you the main characteristics to shortlist ETFs for the best trading fit.

You May Also Like

Hot Definitions
  1. Fixed-Charge Coverage Ratio

    A ratio that indicates a firm's ability to satisfy fixed financing expenses, such as interest and leases. It is calculated ...
  2. Efficiency Ratio

    Ratios that are typically used to analyze how well a company uses its assets and liabilities internally. Efficiency Ratios ...
  3. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  4. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  5. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  6. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
Trading Center