Foreign Currency ETFs (List)
When it comes to making money with foreign currencies, or forex, it isn’t all about trading pairs and lots. Forex traders also have the option of trading ETFs, or exchange-traded funds, that trade just like stocks on the New York Stock Exchange.
What is an ETF
An ETF is simply a fund of holdings that trades openly like stocks and has a ticker for easy buying and selling. All told, ETFs are simply mutual funds that trade on the stock exchanges but are generally 2-3 times cheaper than mutual funds.
Downside to Currency ETFs
There is some downsides to currency ETFs and that is that there are a limited number of choices, they charge an annual fee, and they do not offer the extreme leverage that forex platforms allow. In fact, most currency exchange-traded funds (ETFs) aren’t leveraged at all, with the highest leverage offered being 3:1. 3:1 is well under the 50:1 that many forex brokers allow.
Foreign Currency Vs Dollar, Non-Leveraged
FXA CurrencyShares Australian Dollar Trust
FXB CurrencyShares British Pound Sterling Trust
FXC CurrencyShares Canadian Dollar Trust
FXE CurrencyShares Euro Trust
FXY CurrencyShares Japanese Yen Trust
FXM CurrencyShares Mexican Peso Trust
XRU CurrencyShares Russian Ruble Trust
FXS CurrencyShares Swedish Krona Trust
FXF CurrencyShares Swiss Franc Trust
BZF WisdomTree Dreyfus Brazilian Real Fund
CYB WisdomTree Dreyfus Chinese Yuan Fund
CEW WisdomTree Dreyfus Emerging Currency Fund – Active
EU WisdomTree Dreyfus Euro Fund
ICN WisdomTree Dreyfus Indian Rupee Fund
JYF WisdomTree Dreyfus Japanese Yen Fund
BNZ WisdomTree Dreyfus New Zealand Dollar Fund
SZR WisdomTree Dreyfus South African Rand Fund
FXB CurrencyShares British Pound Sterling Trust
FXC CurrencyShares Canadian Dollar Trust
FXE CurrencyShares Euro Trust
FXY CurrencyShares Japanese Yen Trust
FXM CurrencyShares Mexican Peso Trust
XRU CurrencyShares Russian Ruble Trust
FXS CurrencyShares Swedish Krona Trust
FXF CurrencyShares Swiss Franc Trust
BZF WisdomTree Dreyfus Brazilian Real Fund
CYB WisdomTree Dreyfus Chinese Yuan Fund
CEW WisdomTree Dreyfus Emerging Currency Fund – Active
EU WisdomTree Dreyfus Euro Fund
ICN WisdomTree Dreyfus Indian Rupee Fund
JYF WisdomTree Dreyfus Japanese Yen Fund
BNZ WisdomTree Dreyfus New Zealand Dollar Fund
SZR WisdomTree Dreyfus South African Rand Fund
Leveraged Currency ETFs – Long and Short
ULE ProShares Ultra Euro ETF
YCL ProShares Ultra Yen ETF
EUO ProShares UltraShort Euro ETF
YCS ProShares UltraShort Yen ETF
YCL ProShares Ultra Yen ETF
EUO ProShares UltraShort Euro ETF
YCS ProShares UltraShort Yen ETF
Do ETFs Make Sense for You?
Ultimately, you’ll have to decide if foreign currency etfs are right for your portfolio. While they do offer the benefit of buying and selling foreign currencies through a brokerage account, they aren’t always suitable for everyone.
Most investors would be wise to instead open forex trading account to buy and sell currencies without buying and selling ETFs. Unlike ETFs, which are assessed a flat commission fee equal to the amount charged for buy/sell orders of stock, foreign currencies are bought and sold with only a spread cost. To buy $2000 of Euro with the FXE ETF would cost you $20 round-trip on the buy and sell, whereas a purchase of $2000 of Euro through a forex account would cost roughly $.40 with a 2 pip spread. Something to think about, small money investors!
