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Currency Trading Funds

 

There are several benefits to using a Currency Trading Fund or ETF. These benefits include :

-You no longer have top open a separate account. To trade currencies in the past, investors had to open futures accounts, but these new ETFs will provide directional exposure to the dollar’s movement by investing in futures for them and also rolling forward the contracts to maintain the exposure.

-Another benefit is ETFs will tend to have lower fees, and the funds trade throughout the days on the markets, so you can buy and sell anytime.

-Currency trading funds will tend to have a lower expense ration than alternate investment. ETFs have expense ratios of 0.50 - .70 percent. Even this low expense ration will be offset by the yield from the fixed income securities they hold as collateral for their futures contracts. Yields on some of the funds can range from 4-7%.

-They provide the opportunity to hedge dollar denominated exposure to the upside or downside against a representation of foreign currencies.

-In the past investors would need thousands of dollars to establish position using futures contracts, Now, using these ETFs and funds, investors can get exposure through funds for much less. As little as $1,000 will work.

 

 

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