ETF Spotlight on CurrencyShares Australian Dollar Trust (NYSEArca: FXA), part of an ongoing series.
Assets: $795 million.
Objective: The CurrencyShares Australian Dollar Trust tries to track the price movement of the Australian dollar against the U.S. dollar.
Holdings: The trust maintains a deposit account denominated in Australian dollars.
What You Should Know:
- Rydex|SGI is the sponsor of the ETF. The company was recently restructured into Guggenheim Investments.
- FXA has an expense ratio of 0.40%.
- The fund is down 1.52% over the last month, down 3.14% over the last three moths and up 2.40% year-to-date.
- Any interest accrued in the deposit account will be used to pay trust expenses, and any excess interest will be distributed to shareholders monthly. The fund has a 12-month yield of 4.12%.
- “The Australian dollar has strengthened significantly due to strong commodity exports to Asia as well as fiscal and monetary stimulus measures of the U.S. government,” Morningstar writes in a profile of the ETF. “Because of the Australian economy’s heavy reliance on mineral wealth, its currency often rises and falls with commodities.”
The Latest News:
- The ETF has rallied above its 50-day and 200-day moving averages amid the recent pullback in the U.S. dollar and strength in commodities.
- The Australian dollar jumped to a three-week high after better-than-expected jobs data lowered expectations of additional interest rate cuts in the near future, report Enda Curran and James Glynn for Dow Jones Newswires.
- The country added 20.400 more jobs in September, or twice previously expected. Unemployment fell to 5.2% from 5.3% in August.
- “This latest economic news, coupled with improving sentiment around the European debt issues and a willingness by authorities there to stabilize the situation, should see the Australian dollar supported on any dips,” Paul Kammel, head of client management at Travelex, said in the DJ report.
CurrencyShares Australian Dollar Trust