February 07, 2006 at 8:24 am by Tom Lydon
Worried about a falling U.S. dollar? With large budget and trade deficits, there are those who worry this scenario could lead to a currency collapse. If you are one of the believers, new exchange-traded funds offer opportunities to protect portfolios from a falling dollar.
iShares Comex Gold Trust (IAU) is an exchange-traded fund that makes it easy for portfolios to invest in gold. Gold helps protect against a falling dollar, since it tends to gain value when paper currencies fall.
Rydex recently introduced an ETF that invests in euros. The Euro Currency Trust (FXE) rises when the dollar falls against the euro and vice versa. This gives investors an opportunity to invest directly in a currency other than the dollar.
For purpose of full disclosure, Tom Lydon serves on the board of Rydex Investments.
Tags: Currency ETFs, IAU
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