Currency ETFs 101 | Page 2 of 2 | ETF Trends

An active currency strategy could be found with the PowerShares DB G10 Currency Harvest Fund (NYSEArca: DBV). The index plays the yield spreads by purchasing futures contracts in the highest yielding currencies of the G10, then sells futures of the three G10 currencies with the lowest yield.

Currency investing comes with inherent risk that touches upon the home country. Things such as geopolitical risk, national debt, trade deficits, interest rates, government default and commodity price swings are all factors that will have an impact on an investment in the currency market.

Read the disclaimer; Tom Lydon is a board member of the funds for Rydex|SGI.

Tisha Guerrero contributed to this article.