Morningstar analyst Timothy Strauts says DBV employs a “hedge-fund-light” strategy.
The ETF provides a version of the carry trade, “one of the oldest trading strategies in finance, in which an investor borrows money in a currency with low interest rates and invests it in another with higher interest rates,” he said. “PowerShares DB G10 Currency Harvest and its underlying index utilize 2 times leverage, as it shorts the three lowest-yielding G10 currencies for the total notional value of its assets and goes long in the three highest-yielding currencies for the notional amount of its assets.”
Table source: Invesco PowerShares
PowerShares DB G10 Currency Harvest
