ETF Trends
ETF Trends

Deutsche Bank and Invesco PowerShares on Tuesday listed a pair of leveraged exchange traded notes that let investors go long or short on the dollar versus a basket of currencies.

The ETNs are designed to provide 300% long and 300% short exposure to futures contracts on the US Dollar Index. They are PowerShares DB 3x Long US Dollar Index Futures ETN (NYSEArca: UUPT) and PowerShares DB 3x Short US Dollar Index Futures ETN (NYSEArca: UDNT).

The new products are structured as ETNs, which are different from exchange traded funds (ETFs). The leveraged dollar ETNs are set up as debt obligations so they carry issuer credit risk. The ETNs are the first exchange traded products to provide investors with leveraged exposure to the US Dollar. Leveraged ETNs and ETFs are geared more to active traders who monitor their portfolios during the day.

The new ETNs are basically leveraged versions of two existing ETFs: PowerShares DB US Dollar Bullish Fund (NYSEArca: UUP) and PowerShares DB US Dollar Bearish Fund (NYSEArca: UDN).

The tracking index reflects the value of the dollar against six currencies, including the euro and yen. The new leveraged dollar ETNs rebalance on a monthly basis, rather than daily, said Amanda Williams, a spokeswoman for Deutsche Bank.

The dollar has bounced recently while stocks and commodities have corrected after a strong run. PowerShares DB US Dollar Bullish Fund is up 2.6% over the past month, according to Morningstar.

PowerShares DB US Dollar Bullish Fund

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.