What is an ETF? -- Part 15: World Currencies | Page 2 of 2 | ETF Trends

Investing in the forex market helps investors diversify and hedge with currencies, which may help reduce risk while maintaining an upside potential. For instance, individuals holding assets denominated in a foreign currency are exposed to currency risks – if the foreign currency weakens compared to the U.S. dollar, the investor’s foreign investments will also depreciate in value once converted back to U.S. dollars.

Unlike the stock market, currencies usually oscillate between a support and resistance level over the long-term. Inflation and monetary policy, for example, prevent currencies from increasing in value indefinitely. As one currency gains value, another has to depreciate to balance the effect out.

List of foreign-currency exposure ETFs:

  • CurrencyShares Australian Dollar Trust (NYSEArca: FXA)
  • CurrencyShares Canadian Dollar Trust (NYSEArca: FXC)
  • CurrencyShares Swedish Krona Trust (NYSEArca: FXS)
  • CurrencyShares Chinese Renminbi Trust (NYSEArca: FXCH)
  • CurrencyShares Swiss Franc Trust (NYSEArca: FXF)
  • CurrencyShares Euro Trust (NYSEArca: FXE)
  • CurrencyShares Japanese Yen Trust (NYSEArca: FXY)
  • CurrencyShares British Pound Sterling Trust (NYSEArca: FXB)
  • PowerShares DB US Dollar Index Bullish Fund (NYSEArca: UUP)
  • PowerShares DB US Dollar Bearish Fund (NYSEArca: UDN)
  • PowerShares DB G10 Currency Harvest Fund (NYSEArca: DBV)
  • WisdomTree Dreyfus Chinese Yuan Fund (NYSEArca: CYB)
  • WisdomTree Dreyfus Emerging Currency Fund (NYSEArca: CEW)
  • WisdomTree Dreyfus Brazilian Real Fund (NYSEArca: BZF)
  • WisdomTree Dreyfus Commodity Currency Fund (NYSEArca: CCX)
  • WisdomTree Dreyfus Indian Rupee Fund (NYSEArca: ICN)
  • WisdomTree Dreyfus Japanese Yen Fund (NYSEArca: JYF)
  • WisdomTree Dreyfus South African Rand Fund (NYSEArca: SZR)

Exchange traded notes:

  • iPath GBP/USD Exchange Rate ETN (NYSEArca: GBB)
  • iPath JPY/USD Exchange Rate ETN (NYSEArca: JYN)
  • iPath EUR/USD Exchange Rate ETN (NYSEArca: ERO)
  • iPath Asian & Gulf Currency Revaluation ETN (NYSEArca: PGD)
  • iPath Optimized Currency Carry ETN (NYSEArca: ICI)
  • iPath GEMS Index ETN (NYSEArca: JEM)
  • iPath GEMS Asia 8 ETN (NYSEArca: AYT)
  • Market Vectors Indian Rupee USD ETN (NYSEArca: INR)
  • Market Vectors-Chinese Renminbi/USD ETN (NYSEArca: CNY)

Leveraged ETFs:

  • ProShares Ultra Euro (NYSEArca: ULE)
  • Proshares Ultra Yen (NYSEArca: YCL)
  • ProShares UltraShort Euro (NYSEArca: EUO)
  • ProShares UltraShort Yen (NYSEArca: YCS)

Leveraged ETNs:

  • Market Vectors Double Long Euro ETN (NYSEArca: URR)
  • Market Vectors Double Short Euro ETN (NYSEArca: DRR)
  • PowerShares DB 3x Long US Dollar Index Futures ETN (NYSEArca: UUPT)
  • PowerShares DB 3x Short US Dollar Index Futures ETN (NYSEArca: UDNT)

For past stories in this series, visit our “What is an ETF?” category.

Max Chen contributed to this article.