Investing in a Declining Dollar

While stocks have been flat with increasing volatility, a strong performer over the past couple of quarters has been a bet against the US dollar.

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With uncertainty in Europe holding back the Euro, a better declining dollar play has been the Swiss Franc.

The CurrencyShares Swiss Franc Trust (FXF) is up 23% over the past 6 months compared to a 9% decline in the S&P 500 over the same time period.

The exchange traded fund is designed to track the price of the Swiss Franc relative to the US dollar.  The ETF’s expense ratio of 0.40% is covered by interest earned on the deposited Swiss Francs.

The Swiss franc is the sixth-most-traded currency in the world, accounting for 6.4% of global foreign exchange transactions. The USD/Swiss franc pair is the fifth-most-traded currency pair.

As a result, the ETF has become popular with investors, gathering over $1 billion of assets.

Find more ways to invest, see the complete list of currency ETFs.

– ETF MarketPro Staff
August 16, 2011