Weak-Dollar Play: New 'ETN' Could Shine

Barclays has come up with a new way to profit from a weak dollar that promises higher returns and lower taxes than conventional exchange-traded funds, but there are also some significant risks to consider.

Last week, the U.K. bank rolled out three exchange-traded notes -- a kind of senior, unsecured debt -- linked to the performance of the euro, British pound and Japanese yen relative to the U.S. dollar.

The iPath EUR/USD Exchange Rate ETN(ERO Quote), iPath GBP/USD Exchange Rate ETN(GBB Quote) and the iPath JPY/USD Exchange Rate ETN(JYN Quote) trade on the NYSE.

Currencies have been gaining respect as an asset class. They can be used for diversification, due to their low volatility and low correlation to other markets. U.S. investors can hold foreign money to protect their portfolios from a weakening dollar. ...