$YANK #ASX - Shorting the Aussie Dollar

With 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