List of Leveraged Foreign Currency ETFs

World currency notes
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There is a lot of debate surrounding leveraged exchange traded funds (ETFs) and exchange traded notes (ETNs), because they tend to carry a lot of risk. These types of funds may not be the right fit for all investors, but if you are more advanced, willing to take on greater risk for the chance of greater reward, or simply looking to try something new, you may want to include them in your ETF trading plans.

Below is a list of some of the many leveraged currency ETFs you can buy and some of their features. Whether you are just doing research or want to learn more about these types of funds in hopes of adding them to your portfolio, there are many options to suit a range of goals.

How Currency ETFs Work

This list focuses on currency funds. Currency ETFs can give your portfolio the exposure you desire for foreign currencies without dealing with many complex trades. Currency ETFs are like pre-packaged investments that track a certain currency, just like how a normal ETF aligns with a larger index.

A currency ETF can be designed to either follow a very specific currency or, in some cases, a whole basket of currencies, which can give you access to more than one if you prefer to invest in a wider spread. 

If you look under the hood of a currency ETF, you’ll find one of two things: either a series of futures contracts designed to mimic the price of a single currency, or actual cash deposits of the currency being tracked.

Either way, the currency ETF is set up with the goal of copying the price and performance of a certain foreign currency, without trying to outperform it.

The Lists

One way to sort ETFs is by how much return they aim for, compared to the return of the underlying index. This is expressed as a ratio. A 2x leveraged ETF will invest $2 for every $1 of investor capital, with the aim of doubling its return compared to that of the given index. A 3x leveraged ETF will aim for triple returns.

List of Leveraged Currency ETFs and ETNs

  • YCL - ProShares Ultra Yen ETF: Daily goal of 2x YEN
  • YCS - ProShares Ultra Short Yen ETF: Daily goal of -2x YEN
  • ULE - ProShares Ultra Euro ETF: Daily goal of 2x EURO
  • EUO - ProShares Ultra Short Euro ETF: Daily goal of -2x EURO
  • CROC - ProShares Ultra Short Australian Dollar ETF: Daily goal of -2x AUD

An inverse fund, like the standard ETFs and ETNs, also tracks a given index. As you might expect, unlike standard funds, inverse ETFs and inverse ETNs aim to profit when the value of that given index falls.

List of Inverse Leveraged Currency ETFs

  • YCS - ProShares Ultra Short Yen ETF
  • EUO - ProShares Ultra Short Euro ETF
  • CROC - ProShares Ultra Short Australian Dollar ETF

List of Inverse Currency ETFs

  • UDN - Invesco DB US Dollar Index Bearish Fund
  • CROC - ProShares Ultra Short Australian Dollar ETF
  • EUFX - ProShares Short Euro ETF
  • EUO – ProShares Ultra Short Euro ETF
  • YCS – ProShares Ultra Short Yen ETF

The Bottom Line

Keep in mind that no investment is without risk, including the above inverse and leveraged foreign currency ETFs. Before making any trades, be sure to research each one of these funds (and notes) on their own. Watch how they react to all types of markets, and learn what is in the ETF so you know how it will impact your portfolio.

If you have any questions or concerns as you review ETFs, be sure to consult a trusted financial professional, such as your broker or advisor.

Lastly, be aware that the returns of foreign currency leveraged ETFs are based on how they perform on a daily basis, not on an annual basis. Most people are not aware of this fact, and it can have a major effect on how you go about vetting funds and choosing which ones are right for your goals.

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