“This fund profits from the appreciation of developed market currencies with sound monetary policies against the U.S. dollar,” according to Morningstar analyst A.J. D’Asaro. “There are two main rationales for owning an inverse dollar fund. First, the U.S. may be unable to grow its way out of its current debt burden without resorting to inflation and dollar debasement, and second, some believe the dollar may also be in danger of losing its special global reserve status, with the euro and Chinese yuan gaining traction as alternatives.”
Investors may also enjoy the lower fees associated with the ETF wrapper. MERK has a 0.79% expense ratio. In comparison, the investor share class MERKX has a 1.30% expense ratio and the institutional share class MHCIX has a 1.05% expense ratio.
It has been a little over two years since Merk first proposed an ETF adaptation of its Hard Currency Fund. [Merk Plans Hard Currency ETF]
For more information on new fund products, visit our new ETFs category.
Max Chen contributed to this article.