Rydex Currency ETFs
November 7th at 1:58am by Tom Lydon
A recent reader asked how he could use exchange traded funds (ETFs) to hedge against a falling U.S. dollar. The Rydex Currency Shares offer investors this hedge with the Euro (FXE), British Pound Sterling (FXB), Canadian Dollar (FXC), Australian Dollar (FXA), Swiss Franc (FXF), Swedish Krona (FXS) and Mexican Peso (FXM). The Swiss Franc seems very stable.
Current posts on Seeking Alpha look at the Rydex Currency Shares and whether or not they should be judged by volume alone. The euro ETF (FXE) has the most volume, but it is not the price leader. "FXE has been the volume leader of the bunch ever since the others were listed in last summer, but, to use an analogy, Microsoft is not a better proxy for tech solely by the virtue of having more volume than Qlogic," Roger Nusbaum argues. Three of the seven currency ETFs have outperformed FXE: the Mexican peso, the Aussie dollar, and the British pound.
Read the disclosure, as Tom Lydon is a board member of Rydex Funds.
