ETF Securities has launched its first range of currency basket exchange traded products, which will allows investors to get exposure to the currency markets while giving them access to a range of currencies simultaneously.
Launched on the London Stock Exchange today the new currency basket ETPs include four tactical currency baskets, which are offered in both bullish and bearish ETP versions, and one strategic currency basket.
According to a note from the provider currency basket ETPs provide investors with a “one-stop shop” offering exposure to multiple currencies and multiple strategies simultaneously. Due to the generally low or negative correlation of currencies with most traditional and alternative asset classes, an allocation to a currency basket within a multi-asset portfolio may help to reduce the overall risk thanks to its diversification benefit.
The ETF Securities US Dollar G10 Basket, the ETF Securities Euro G10 Basket and the ETF Securities Pound Sterling Basket are based on a Morgan Stanley index designed to provide a measure of general US dollar, euro and sterling performance against G10 currencies respectively.
The ETF Securities Commodity Currency Basket is based on a Morgan Stanley index designed to reflect the performance of currencies whose economies rely heavily on the export of commodity assets. The basket is comprised of the Australian Dollar, the New Zealand Dollar, the Norwegian Kroner and the Canadian Dollar, which are collectively known as commodity currencies.
The ETF Securities Multi-FX Basket, which is a strategic currency basket, is based on four separate component strategies. It is based on a Morgan Stanley index designed to identify and capture opportunities for returns across a selection of G10 currencies against the US Dollar.
Martin Arnold, senior research analyst at ETF Securities said in a statement: “Currency baskets can provide investors with a unique source of return generation by gaining direct access to the key investment themes driving financial markets. Not only can investors benefit from taking a tactical view on currency direction, but in an environment of ultra-loose central bank policy, managing currency exposures is critical to overall portfolio performance.”
ETF Securities launched its currency platform in 2009 when it introduced the first ever single currency ETPs in Europe. It now has assets under management of over $850 million with 86 different single currency ETPs, which covers all G10 and some emerging market currencies.
Most recently ETF Securities put forward a proposed solution to the silver fix, which is due to come to an end in the middle of August.