Top Currency Funds Bet Against Dollar
At 9.2% year-over-year, U.S. producer price inflation in June spiked to the worst in 27 years. Prospects for American businesses, stocks and fixed-income investments remain suspect.
In this climate, the best-performing currency funds in the second quarter were those betting on currencies that performed relatively well versus the greenback.
The best-performing currency fund from March 31 to June 30 is the CurrencyShares Australian Dollar Trust (FXA). The fund is designed to measure the amount of U.S. dollars needed to buy an Australian dollar. So, as the U.S. dollar declines in value, it takes more and more of our dollars to buy the Aussie variety.
The spot value weakened by 4.75% in the second quarter, sending the fund up by 6.71%.The second-place currency fund is the CurrencyShares Mexican Peso Trust (FXM). As pesos per dollar shrank 3.13% for the period, this fund gained 5.18% on dollar weakness against the Mexican peso. Both of the above funds are direct plays on specific currencies. If the U.S. dollar strengthens against these two foreign currencies, then these funds are designed to lose money. On the other hand, this next fund tracks an index attempting to determine which currencies are set to appreciate. The third-place fund, PowerShares DB G10 Currency Harvest Fund (DBV) improved by 5.10% in the second quarter, tracking the Deutsche Bank G10 Currency Future Harvest Index. The theory behind the index is that currencies of countries with relatively high interest rates tend to rise while those of relatively low interest rates tend to fall. Futures contracts are bought for bullish currencies and sold short for currencies expected to weaken.
|Changes in Select World Currencies per U.S. Dollar|
|Spot Currency||Ticker||2nd Quarter Change||US Dollar|
|NEW ZEALAND DOLLAR||NZD||3.12%||Stronger|
|Best-Performing Currency Funds in the Second Quarter|
|Fund (Ticker) Rating||Total Return 2nd Quarter||Fund Type|
|CurrencyShares Australian Dollar Trust (FXA) A+||6.71%||ETF|
|CurrencyShares Mexican Peso Trust (FXM) A+||5.18%||ETF|
|PowerShares DB G10 Currency Harvest Fund (DBV) C+||5.10%||ETF|
|ELEMENTS Linked to the Australian Dollar/U.S. Dollar Exchange Rate ETN (ADE) U||2.67%||ETN|
|Barclays GEMS Index ETN (JEM) U||1.68%||ETN|
|iPath EUR/USD Exchange Rate ETN (ERO) A+||1.60%||ETN|
|CurrencyShares British Pound Sterling Trust (FXB) A||1.46%||ETF|
|CurrencyShares Canadian Dollar Trust (FXC) B+||1.02%||ETF|
|iPath Optimized Currency Carry ETN (ICI) U||0.93%||ETN|
|ELEMENTS Linked to the Euro/U.S. Dollar Exchange Rate ETN (ERE) U||0.92%||ETN|
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV