A new filing from Elkhorn Investments outlines plans for an ETF that will take long positions in foreign currencies while offering short exposure to the U.S. dollar. The Elkhorn Long Non-USD Currency ETF will be actively managed.
The fund is set to list on the Bats exchange, which is owned by ETF.com’s parent company, CBOE. The filing did not include a ticker or expense ratio.
According to the prospectus, the fund will invest in currency futures contracts via a wholly owned subsidiary domiciled in the Cayman Islands. The subsidiary will hold long positions in one or more foreign currency contracts and roll those forward to maintain its fully invested position.
The fund can invest up to 25% of its portfolio in the subsidiary, with the rest invested in short-term investment-grade fixed-income and cashlike assets such as money market instruments.
When managing the currency exposure of the fund, the fund’s managers will take into account political and economic factors in individual countries when making decisions about the portfolio, as well as the volatility and liquidity of the respective futures contracts, the prospectus said.
Elkhorn currently has 13 ETFs trading, with roughly $168 million in assets under management.
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