$YANK #ASX - Shorting the Aussie DollarWith the sharemarket in a pretty unpredictable state I have been looking around for some different options. Thought this could be interesting as I keep reading a lot of pundits suggesting that the Aussie dollar might be on its way to 60 cents. YANK is up 30% since Feb and that was during a pretty bullish period, so might be worth a look as an alternative to traditional shares. There is a non leveraged ETF called USD which does similar.
(Additionally BBUS, BBOZ, BEAR are also ASX traded ETF's that can help you more easily short the ASX and US if you think they are headed downwards. See my older post if interested in these.)
BetaShares Strong U.S. Dollar Fund (hedge fund)
OBJECTIVE
Provide investors with a simple way to obtain cost-effective geared exposure to the change in value of the U.S. Dollar relative to the Australian Dollar.
ABOUT
Gives investors a simple and accessible way to obtain magnified “long” exposure to the value of U.S. Dollar relative to the Australian Dollar
A 1% increase in the value of the U.S. Dollar relative to the Australian Dollar on a given day can generally be expected to deliver a 2.0% to 2.75% increase in the value of the Fund (and vice versa)
Profit from a view that the U.S. Dollar will strengthen relative to the Australian Dollar via an efficient use of capital
Hedge against USD currency risk – reduce exposure to movements in AUD/USD exchange rates
Diversify a portfolio – currencies have historically shown low correlation to equities, fixed income and most other asset classes
Alternative to CFDs or FX platforms
Gearing magnifies gains and losses and may not be a suitable strategy for all investors. Returns over longer periods will not necessarily be equivalent to 200% – 275% of the return of the U.S. Dollar relative to the Australian Dollar over that period.
Advantages
Access – obtain magnified exposure to the performance of the U.S. Dollar relative to the Australian Dollar as simply as buying any share
Convenience – investors avoid complications and costs of CFDs or other investments providing ‘geared’ currency exposure
No margin calls for investors – cannot lose more than initial investment
Liquidity – available to trade on ASX like any share
