Investopedia

Continue to Site »

Euro ETF

Filed Under » , , , ,
Dictionary Says

Definition of 'Euro ETF'

An exchange-traded fund that invests in the euro currency, either directly or through the holding of euro-denominated short-term debt instruments. Euro ETFs are often set up as currency trusts or grantor trusts, meaning that stakeholders have a specific claim to a set amount of euros per share.
Investopedia Says

Investopedia explains 'Euro ETF'

The euro is one of the most liquid currencies in the world, making ETFs an attractive option for investors who wish to gain from the currency's appreciation without entering the futures or forex markets. Euro ETFs can also be shorted, as a bet that the euro will fall compared to the dollar.

Euro ETFs do not have an underlying index to manage against; instead, they attempt to track as closely as possible the exchange rate between the euro and the U.S. dollar, minus expenses. Some of these funds are not eligible for the long-term capital gains tax rate of 15%, because a raw currency is essentially being held by the ETF shareholder. Most ETFs in this class will pay regular dividends equaling the local (euro-denominated) interest rate that is received on the short-term commercial-paper instruments or government bonds that are held in the fund.

Related Video for 'Euro ETF'

Articles Of Interest

  1.

    Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.

  2. Getting Started In Forex Options

    Stocks are not the only securities underlying options. Learn how to use FOREX options for profit and hedging.

  3. Get To Know The Major Central Banks

    The policies of these banks affect the currency market like nothing else. See what makes them tick.

  4. How are international exchange rates set?

    International currency exchange rates display how much one unit of a currency can be exchanged for another currency. Currency exchange rates can be floating, in which case they change continually ...

  5. An Introduction To Exchange-Traded Funds (ETFs)

    Exchange-traded funds (ETFs) offer investors the ability to diversify over an entire sector or market segment in a single investment. Find out how they are created and what they can do for your ...

  6. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.

  7. Women: Invest In Your Financial Literacy

    Learning about money may seem intimidating, but it's not as hard as it looks.

  8. 4 Behavioral Biases And How To Avoid Them

    Here are four common common behavioral biases for traders and how to minimize their effects on your portoflio.

  9. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.

  10. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Validation Period

    The amount of time necessary for the premium on an insurance policy to cover the commissions, the cost of investigation, medical exams and other expenses associated with the issuance of the policy.

  2. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  3. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  4. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  5. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  6. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
Trading Center