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Currency ETFs can be dodgy

By   || November 6, 2009 at 18:04 GMT
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ETFs can be great investment vehicles for big indexes like the S&P, but they seem to be less effective in trying to track commodities and currencies. Several times this year there have been situations in which currency ETFs have become completely unmoored from their underlying market and the same is happening in the UUP dollar index ETF.

Limits on the number of shares and limits on the number of contracts the Feds allow the funds to hold can sometimes cause a disconnect. ETFs seem to work very well for shares, but investors would be wise to steer clear of making commodity and currency bests using those vehicles.

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