After getting punched around in recent weeks, euro currency exchange traded funds (ETFs) have surged 2.6% in the last week alone. The question being asked now is, “Is the worst over?”
The most recent news emerging from Europe is hardly music to anyone’s ears:
- A downgrade of Greece’s credit rating to “junk” status by Moody’s Investors Service Tuesday
- The European Central Bank’s saying it will place a 5% charge on banks exchanging beaten-up Greek bonds for cash
- Growing worry about the ability of Spanish banks and companies to access international capital markets
- Rumors that Spain will need European Union help
- Disappointment over German investor sentiment
- Jumping borrowing costs for Greece, Spain and Portugal, reports Neil Shah for The Wall Street Journal.
Yikes.
In response, analysts seem to be scratching their heads over the euro’s eventual direction from here: higher, lower or stay put. For days now, there’s been a strange disconnect between global stock markets and the euro, which have risen, and Europe’s bond markets, which have suffered. [Spotlight on DGL.]
A weaker euro has its pluses, chiefly that it would make European goods cheaper for global consumers and it would help boost tourism to eurozone countries. [Euro ETFs: Time to Buy?]
- Market Vectors Double Short Euro ETN (NYSEArca: DRR)
- ProShares Ultra Euro (NYSEArca: ULE)
- CurrencyShares Euro Trust (NYSEArca: FXE)
Gold has begun to trade flat, but if the eurozone worries continue, investors may continue to seek gold exposure. Intelligent Investing on Forbes reports that gold ETFs may be the easiest bet for most investors, since depending on the fund type, they eliminate the need for finding storage, rolling futures or picking single stocks. [Commodity ETFs to Know.]
For more stories about gold, visit our gold category.
Some of the growing number of gold-focused ETFs include:
- SPDR Gold Shares (NYSEArca: GLD): Holds physical bullion.
- ETFS Physical Swiss Gold Shares (NYSEArca: SGOL): Holds physical bullion.
- Market Vectors Junior Gold Miners ETF (NYSEArca: GDXJ): Holds the stock of small- and mid-cap gold mining companies.
- iShares COMEX Gold Trust (NYSEArca: IAU): Holds physical gold bullion.
- PowerShares Global Gold and Precious Metals Portfolio (NASDAQ: PSAU): An equity fund that holds miners of gold and other precious metals.
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.