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Currency Trading Funds - Powershares
The Invesco PowerShares DB G10 Currency Harvest ETF, launched during the fall of 2006, trades based upon a view that historically speaking, currencies with higher interest rates will outperform those currencies with lower rates. Basically this exchange traded fund ETF incorporates a carry trade by going long on the futures contracts of the three currencies with the highest interest rates and going short on those futures for currencies with the lowest rates. Those investments and rates are reviewed every quarter, and the longs and shorts are reallocated if necessary.
Deutsche Bank Commodity Services, which manages the currencies ETF and index it follows, states that the volatility of the index is usually about one half the volatility of the S&P 500 index.
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