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Top and Flop Currency ETFs YTD

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The year 2015 was wholly attributed to the king dollar. PowerShares DB US Dollar Bullish ETF (UUP), which tracks the performance of the U.S. dollar against a basket of currencies, added about 5.6%. However, the greenback started to lose steam as it entered 2016 as the U.S. economy lost momentum (read: ETFs to Rise if Dollar Falls).

There is a slim chance of the Fed hiking rates frequently this year given the turmoil in the global market. So, the greenback is unlikely to rule 2016. In such a scenario, investors may be interested in the top- and worst-performing currencies and their related ETFs in the year-to-date frame. Below we highlight such products in detail.


CurrencyShares Japanese Yen Trust (FXY)

The Japanese yen is the best-performing currency this year due to its safe-haven nature. Given the spike in volatility due to global growth worries and Chinese market crash, investors flocked to safe assets like yen. This is why FXY – which reflects the price in USD of the Japanese yen – has added 6.1% so far this year (as of February 18, 2016). The fund has a Zacks ETF Rank #3 (Hold) (read: Yen ETF Gains on Bank of Japan Stimulus Changes).

Market Vectors-Chinese Renminbi/USD ETN (CNY)

The world may be busy in discussing the devaluation story of the Chinese currency yuan, but in reality the Chinese Renminbi ETF is the second-best performing currency so far this year. CNY which fund seeks to track the performance of the Chinese renminbi versus the U.S. dollar has added about 2.6% so far this year (as of February 18, 2016). The fund has a Zacks ETF Rank #4 (Sell).

The inclusion of yuan to IMF’s reserve currency list as well as the Chinese central bank’s strengthening of yuan’s value against the U.S. dollar in mid February probably have boosted investors’ confidence over the Chinese renminbi (read: IMF Green Signal Put Yuan ETFs in Focus).

CurrencyShares Euro Currency Trust (FXE)

As investors’ risk appetite has sputtered this year, euro has also acted as a safe-haven currency. As a result, FXE – which looks to reflect the price of euro in USD – has returned 2% in the year-to-date frame (As of February 18, 2016).


WisdomTree Indian Rupee Strategy ETF (ICN)

On February 18, the Indian rupee tumbled to the lowest level in over two-and-a-half years against the U.S. dollar. The reason for this decline is global growth concerns and the prevalent uncertainty over oil prices. As a result, ICN is down 3.1% so far this year (as of the same date). The fund has a Zacks ETF Rank #3 (Hold).

CurrencyShares British Pound Sterling ETF (FXB)

The U.K. currency is in a tight spot, having lost about 6.5% versus the euro since the start of December. A retreat in Bank of England’s rate hike expectations and extended talks over of Brexit have weakened the British currency this year, as per sources. The fund is down 2.8% so far this year (as of February 18, 2016).

UUP in Focus

Needless to say, the U.S. dollar will also be at the forefront of the laggard’s list. On February 3, 2016, the U.S. dollar plummeted the most in seven years as lackluster economic readings minimized the odds of aggressive Fed policy tightening this year. The dollar ETF UUP has lost about 2% so far this year (as of February 18, 2016).
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