For instance, the PowerShares DB U.S. Dollar Bullish Fund (NYSEArca: UUP), which tries to reflect movement of the U.S. dollar against a basket of foreign currencies, is a good way to capture safe-haven sentiment during times of volatility or uncertainty – the ETF has proven to be uncorrelated with stocks.
In contrast, gold ETFs, like the SPDR Gold Trust (NYSEArca: GLD), can be used to protect against depreciating currencies, especially in light of the loose global monetary policies in the wake of the financial crisis. [Gold ETFs for $1,800 or $1,600 an Ounce]
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own GLD.