Currency

Currency based funds and ETFs invest the majority of their assets in... Currency based funds and ETFs invest the majority of their assets in foreign currencies or foreign currency futures contracts. These funds, which tend to be priced in U.S. dollars, are usually passively managed. They can be leveraged or unleveraged. There are also inverse versions of these funds, which allow investors to express a bearish view on a particular currency. The most liquid currency funds and ETFs are those that are tied to developed-market currencies, such as the British Pound, Euro, or Japanese Yen. Currency values are affected by a number of factors, such as relative interest rates (interest rate differentials among countries), economic growth expectations, commodity prices, budget and trade deficits, and geopolitical tensions. Speculators also play a big role in short-term currency fluctuations. As a result, these may be appropriate for an aggressive investor willing to take on a fair amount of risk to achieve higher returns. Last Updated: 12/20/2024 View more View less

Currency based funds and ETFs invest the majority of their assets in foreign currencies or foreign currency futures contracts. These funds, which tend to be priced in U.S. dollars, are usually passively managed.... Currency based funds and ETFs invest the majority of their assets in foreign currencies or foreign currency futures contracts. These funds, which tend to be priced in U.S. dollars, are usually passively managed. They can be leveraged or unleveraged. There are also inverse versions of these funds, which allow investors to express a bearish view on a particular currency. The most liquid currency funds and ETFs are those that are tied to developed-market currencies, such as the British Pound, Euro, or Japanese Yen. Currency values are affected by a number of factors, such as relative interest rates (interest rate differentials among countries), economic growth expectations, commodity prices, budget and trade deficits, and geopolitical tensions. Speculators also play a big role in short-term currency fluctuations. As a result, these may be appropriate for an aggressive investor willing to take on a fair amount of risk to achieve higher returns. Last Updated: 12/20/2024 View more View less