In a nutshell, currency ETFs may not be the best buy-and-hold play. Rather, they can be a good tool for investors that want to hedge or speculate for or against the U.S. dollar.

Below are a few ETFs that can be used as diversification away from the U.S. dollar, for those who are agreeing with the long term trend of a weaker U.S. dollar:

  • WisdomTree Emerging Markets Local Debt (NYSEArca: ELD): Invests in sovereign bonds of emerging markets, giving higher weights to those countries that display fiscal discipline.
  • Vanguard FTSE All-World ex U.S ETF (NYSEArca: VEU): This fund includes about every investable country besides the U.S. with a market cap weighted approach.
  • iShares S&P Global Materials (NYSEArca: MXI): As an indirect play on commodities, investors that want value would seek this out. Over the long term, the outlook for a funds such as this is positive.

WisdomTree Emerging Markets Local Debt


Tisha Guerrero contributed to this article.