Exchange traded fund (ETF) provider WisdomTree, which already has a robust line of currency funds, is gearing up for more such ETFs. One will track the U.S. dollar while the other is designed to track commodity currencies.
WisdomTree has announced its intent to launch two new currency ETFs, writes ETF Professor for Benzinga.
The WisdomTree Rising Dollar Fund will track the an appreciating U.S. dollar against 15 currencies from developed and emerging markets. It will in theory compete with the PowerShares DB U.S. Dollar Bullish (NYSEArca: UUP), but the two funds differ in construction. UUP is designed to replicate the performance of being long on the dollar against six major currencies.
Friday’s jobs report, however, could keep the dollar weak for the time being if the Fed keeps rates where they are. The unemployment rate stands at 10%. [The U.S. dollar ETFs.]
Albert Bonzo at CNBC believes that the dollar will likely gain ground against other G7 currencies, but is expected to remain weak compared to the currencies driven by commodity-based economies such as Brazil, Canada and Australia. [Dollar ETF’s next move.]
The other WisdomTree currency ETF will track commodity currencies from countries such as Australia, Brazil, Canada, New Zealand, South Africa and others with economies tied to their respective reserves of natural resources.
Investment inflows into commodities in 2009 surpassed those of 2008, and investors have been more than compensating for the weak physical demand. Long-only commodity ETFs have seen about $3 billion in new assets since November, as net cash flow was more than triple October’s total. It was also the biggest influx since summer. [ETF Spotlight: Commodity-Index Trust.]
For more information on currencies, visit our currency ETFs category.
Max Chen contributed to this article.