|Home | About CurrencyShares | Investor Benefits & Risks
The CurrencyShares products are intended to offer investors a new and different opportunity to participate in the foreign currency market through an investment in securities. Historically, the logistics and expense of investing in foreign exchange have been a barrier to entry for many investors. The CurrencyShares products are aimed at overcoming the barriers to entry. A prospective purchaser of CurrencyShares should not encounter any tasks or costs beyond those associated with purchasing another publicly-traded equity security. CurrencyShares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining potential investment benefits similar to those of holding foreign currency.
An investment in CurrencyShares may help to balance a portfolio or protect against currency swings, thereby reducing overall risk. All forms of investment, however, carry some degree of risk. Investing in CurrencyShares carries the same risks as investing directly in foreign currency.
Investors may wish to invest in foreign currency in order to take advantage of short-term tactical or long-term strategic opportunities. From a tactical perspective, an investor that believes that the U.S. dollar is weakening relative to a particular foreign currency may choose to buy shares of that particular CurrencyShares Trust in order to capitalize on the potential movement. An investor that believes that a particular foreign currency is overvalued relative to the U.S. dollar may choose to sell shares of that particular CurrencyShares Trust.
From a strategic standpoint, since currency movements can affect returns on cross-border investments and businesses, both individual investors and businesses may choose to hedge their currency risk through the purchase or sale of foreign currency. For example, in the case where a U.S. investor has a portfolio consisting of European equity and fixed income securities, the investor may decide to hedge the currency exposure that exists within the European portfolio by selling an appropriate amount of shares of the CurrencyShares Euro Trust. Such sales may include short sales in accordance with applicable SEC regulations. In doing this, the U.S. investor may be able to mitigate the impact that changes in exchange rates have on the returns associated with the European equity and fixed income components of the portfolio.
Similarly, a business that has currency exposure because it manufactures or sells its products abroad is exposed to exchange rate risk. Buying or selling shares of one or more CurrencyShares Trusts in appropriate amounts may reduce the business’s exchange rate risk.
More generally, investors that wish to diversify their investment portfolios with a wider range of non-correlative investments may desire to invest in foreign currencies. Non-correlative asset classes, such as foreign currencies, are often used to enhance investment portfolios by making them more consistent and less volatile. Less volatility means lower risk and closer proximity to an expected return.
Risks to Consider
The value of the shares of each CurrencyShares Trust is tied to the value of a specific currency that is held by the trust. Fluctuations in the price of the currency could materially and adversely affect the value of the applicable Trust's shares. Several factors may affect the price of foreign currency relative to the U.S. dollar including:
- National debt levels and trade deficits
- Domestic and foreign inflation rates and investors' expectations concerning inflation rates
- Domestic and foreign interest rates and investors' expectations concerning interest rates
- Investment and trading activities of mutual funds, hedge funds and currency funds; and
- Global or regional political, economic or financial events and situations
In addition, the currency in any CurrencyShares Trust may not maintain its long-term value in terms of purchasing power in the future. When the price of the currency declines, the price of a share would likely decline as well.
Each prospectus contains more complete information about the specific CurrencyShares Trust. Investors should carefully consider the investment objectives, risks, charges and expenses of each CurrencyShares Trust before investing. The risks associated with each of the CurrencyShares Trusts, as well as other considerations. For a more complete discussion of risk factors applicable to each CurrencyShares Trust, carefully read the particular Trust's prospectus..
CurrencyShares as an Asset Class
Each of the
CurrencyShares® Australian Dollar (FXA) Trust,
CurrencyShares® British Pound Sterling (FXB) Trust,
CurrencyShares® Canadian Dollar (FXC) Trust,
CurrencyShares® Chinese Renminbi (FXCH) Trust,
CurrencyShares® Euro (FXE) Trust,
CurrencyShares® Japanese Yen (FXY) Trust, CurrencyShares® Singapore Dollar (FXSG) Trust, CurrencyShares® Swedish Krona (FXS) Trust and
CurrencyShares® Swiss Franc (FXF) Trust (each a “Trust” and collectively, the “Trusts”) has filed a registration statement (including a prospectus) with the SEC for the offerings to which this communication relates. Before you invest in the shares of a Trust, you should read the prospectus in the registration statement and other documents the Trust has filed with the SEC for more complete information about the Trust and its offering. You may get these documents for free by visiting EDGAR on the SEC web site at www.sec.gov. Alternatively, you may click the links above or the Trust will arrange to send you its prospectus if you request it by calling toll-free 800.820.0888. Other information on this web site about the CurrencyShares Trusts is for informational purposes only and is not intended to be a complete discussion of all material information you should know about the CurrencyShares Trusts. Further, information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any CurrencyShares Trust and is not intended to be investment, tax, financial or legal advice.
The information contained on this web site regarding the CurrencyShares Trusts is directed at, and is intended for distribution to and for use by, U.S. persons only. The information is not intended for distribution to or use by any person in any other jurisdiction.
CurrencyShares® are subject to risks similar to those of stocks and may not be suitable for all investors. The value of the shares of each CurrencyShares Trust relates directly to the value of the foreign currency held by the particular Trust. This creates a concentration risk associated with fluctuations in the price of the applicable foreign currency. Accordingly, a decline in the price of that currency will have an adverse effect on the value of the shares of the particular CurrencyShares Trust. Factors that may have the effect of causing a decline in the price of a foreign currency include national debt levels and trade deficits, domestic and foreign interest rates, investment and trading activities of institutions and global or regional political, economic or financial events and situations. Investors should consider the investment objectives, risks, charges and expenses of these products carefully before investing. The prospectus pertaining to each product contains this and other information about the product. Please read the applicable prospectus, including the Risk Factors section, carefully before you invest.
Shares can be bought and sold through a broker and the purchasers or sellers may have to pay brokerage commissions in connection with the transaction. Investment returns and principal value will fluctuate so that shares may be worth more or less than original cost. Shares may only be redeemed directly from the Trust by Authorized Participants via baskets (as defined in the prospectus). There can be no assurance that an active trading market for the shares will develop or be maintained.
This information must be accompanied by a current CurrencyShares® Trust prospectus. Please read the prospectus carefully before investing. The CurrencyShares Trusts are not investment companies registered under the Investment Company Act of 1940. The Trust(s) are not subject to the regulatory requirement of investment companies.
The CurrencyShares Trusts are distributed by Guggenheim Funds Distributors, LLC. Guggenheim Investments represents the investment management businesses of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investment Advisors, LLC, ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisers to the referenced funds. Securities offered through Guggenheim Funds Distributors, LLC, an affiliate of Guggenheim, SI, GFIA and GPIM.
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