According to Morninstar data, total returns for currency ETFs in the first quarter were 2.08 % and for March the sector incurred losses of 1.48 %. Net assets in currency ETFs were $5 billion, accounting for just 0.4 % of ETF assets totaling $1.2 trillion. In the first quarter, currency ETFs had net outflows of $1.479 billion and about $461 million outflows in March.

To compare, equities account for 70% of the total ETF assets, fixed income about 17% and commodities at 12%, reports Dreyfuss. [Watch Dollar ETF for Next Moves in Gold, Stocks]

Some investors use currency ETFs to hedge their portfolio. Furthermore, U.S. investors with ETFs following non-U.S. assets most likely have sizable exposure to foreign currencies, one reason some choose not to invest in pure currency ETFs. [Currency ETFs: British Pound Rallies on Euro Safe-Haven Buying]

Going forward, some analysts believe there is potential in emerging market currencies. For example, WisdomTree Asset Management Inc., has positioned itself in emerging markets through ETFs that provide not only currency but also local debt exposure.

Various currency ETFs:

  • CurrencyShares Euro Trust (NYSEArca: FXE)
  • CurrencyShares Australian Dollar (NYSEArca: FXA)
  • WisdomeTree Emerging Currency (NYSEArca: CEW)
  • WisdomTree Brazilian Real (NYSEArca: BZF)
  • PowerShares DB G10 Currency Harvest Fund (NYSEArca: DBV)

Tisha Guerrero contributed to this article

Read the disclaimer; Tom Lydon is a board member of the funds for Guggenheim Investments.