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Is Invesco DB US Dollar Index Bullish ETF (UUP) a Strong ETF Right Now?

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The Invesco DB US Dollar Index Bullish ETF (UUP - Free Report) made its debut on 02/20/2007, and is a smart beta exchange traded fund that provides broad exposure to the Currency ETFs category of the market.

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by Invesco, UUP has amassed assets over $2.07 billion, making it the largest ETF in the Currency ETFs. Before fees and expenses, this particular fund seeks to match the performance of the Deutsche Bank Long USD Currency Portfolio Index - Excess Return.

The Deutsche Bank Long USD Currency Portfolio Index - Excess Return is a rules-based index composed solely of long U.S. Dollar Index futures contracts that trade on the ICE futures exchange.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

With one of the more expensive products in the space, this ETF has annual operating expenses of 0.78%.

UUP's 12-month trailing dividend yield is 0%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Nybot Finex United States Dollar Index Future-9-19-2022 accounts for about 101.68% of total assets, followed by Invesco Government & Agency Portfolio (AGPXX) and United States Treasury Bill-9-27-2022.

Its top 10 holdings account for approximately 201.03% of UUP's total assets under management.

Performance and Risk

The ETF has gained about 18.92% so far this year and is up roughly 22.29% in the last one year (as of 09/28/2022). In the past 52-week period, it has traded between $25.05 and $30.67.

The fund has a beta of -0.14 and standard deviation of 7.30% for the trailing three-year period, which makes UUP a medium risk choice in this particular space. With about 10 holdings, it has more concentrated exposure than peers.


Invesco DB US Dollar Index Bullish ETF is an excellent option for investors seeking to outperform the Currency ETFs segment of the market. There are other ETFs in the space which investors could consider as well.

First Trust Global Tactical Commodity Strategy ETF (FTGC - Free Report) tracks N/A and the Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF (PDBC - Free Report) tracks N/A. First Trust Global Tactical Commodity Strategy ETF has $4.07 billion in assets, Invesco Optimum Yield Diversified Commodity Stratgy No K1 ETF has $7.40 billion. FTGC has an expense ratio of 0.95% and PDBC charges 0.62%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Currency ETFs.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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