New ETF Tackles the Carry Trade

Currency exchange-traded funds of old are hedges against the dollar, but a new product from PowerShares and Deutsche Bank gives investors currency exposure that is designed to simplify the byzantine world of the interest rate-based carry trade.

The recently launched PowerShares DB G10 Currency Harvest Fund(DBV Quote) tracks the DB G10 Currency Futures Harvest Index, which follows the interest rates of the U.S. dollar, the euro, the yen, the Canadian dollar, the Swiss franc, the British pound, the Australian dollar, the New Zealand dollar, the Norwegian krone and the Swedish krona.

"When you ask whether it's a bullish or bearish dollar play, it's neither. It's really a currency strategy," says Kevin Rich, chief executive officer of DB Commodity Services, which is the managing owner of the Currency Harvest ETF. ...