ETF Securities, a leading provider of exchange-traded products (ETPs), has launched a range of currency basket ETPs.
ETF Securities has expanded its currency ETP platform with the launch of a range of currency basket ETPs.
The products, which have been listed on the London Stock Exchange and will cross list on the Deutsche Börse later this month, offer investors a transparent and cost effective way to get exposure to the foreign exchange markets by gaining access to a range of currencies simultaneously.
The range includes four tactical currency baskets and one strategic currency basket. The tactical currency baskets are offered in both a bullish and bearish ETP version. They are all linked to indices provided by Morgan Stanley.
The US dollar/G10, euro /G10 and pound sterling/G10 tactical currency basket ETPs are based on indices designed to provide a measure of their respective performance against a basket of G10 currencies.
The commodity tactical currency basket ETP is based on an index designed to reflect the performance of “commodity currencies”, namely currencies whose economies rely heavily on the export of commodity assets, against the US dollar. The basket comprises the Australian dollar, the New Zealand dollar, the Norwegian kroner and the Canadian dollar.
The strategic currency basket ETP is linked to an index designed to identify and capture opportunities for returns across a selection of G10 currencies against the US dollar. It incorporates four separate component strategies, which reflect distinct investment themes within the currency industry.
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.
Commenting on the launch, Martin Arnold, Senior Research Analyst at ETF Securities, said: “We view this suite of products as a natural progression for our business, which already boasts a strong expertise in currency ETPs. 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.”
The full list of new products is as follows:
ETFS G10 vs USD Multi Strategy FX Basket Security (ENFX)
ETFS Bearish USD vs Commodity Currency Basket Securities (LCOM)
ETFS Bullish USD vs Commodity Currency Basket Securities (SCOM)
ETFS Bearish GBP vs G10 Currency Basket Securities (SGBB)
ETFS Bullish GBP vs G10 Currency Basket Securities (LGBB)
ETFS Bearish USD vs G10 Currency Basket Securities (SUSB)
ETFS Bullish USD vs G10 Currency Basket Securities (LUSB)
ETFS Bearish EUR vs G10 Currency Basket Securities (SEUB)
ETFS Bullish EUR vs G10 Currency Basket Securities (LEUB)
The new products build on ETF Securities’ currency platform, which was launched in 2009 when it introduced the first ever single currency ETPs in Europe. Assets under management on this platform have since grown to over $580 million. The existing line-up contains 86 different single currency ETPs and covers all G10 and some emerging market currencies.