With headlines that are tied to matters in Europe pervading the daily routines of institutional portfolio managers, currency ETFs have grown tremendously over the past year or so in terms of asset levels, average daily trading volumes, and even level of recognition of ticker symbols.
While not a member of the Eurozone, CurrencyShares British Pound Sterling (NYSEArca: FXB) is just one example of an ETF that delivers exposure to spot currency moves, and can be used for hedging purposes if not outright speculation by managers whom are looking for long or short exposure to the currency.
FXB is designed to provide the investor with exposure to the GBP/USD currency exchange rate, and like most currency based ETFs, utilizes futures contracts to achieve these objectives.
Year to date, FXB has out-performed the Euro, as measured by CurrencyShares Euro (NYSEArca: FXE), up 0.08% versus FXE’s decline of 3.56%. PowerShares U.S. Dollar Index Bullish (NYSEArca: UUP) is up 1.11% year to date.