Currency ETFs

Consider the CurrencyShares British Pound Sterling Trust (FXB)

As part of the series of currency exchange-traded funds (ETFs) offered by Invesco PowerShares, the CurrencyShares British Pound Sterling Trust (FXB) is designed to track the price of the British pound sterling, the official currency of the United ingdom.

Incorporated in the United States, FXB holds British pounds in a deposit account. Investors also should do their due diligence regarding the fund’s tax efficiency, since any distributions or capital gains are taxed at ordinary income rates, without regard to the holding period.

With $4.76 million in daily trading volume and a tight average 60-day trading spread of just 0.02%, analysts rate FXB highly in terms of trading liquidity. Thus, both large and small investors should be able to trade the fund easily.

FXB, with $197.10 million in total assets under management and an expense ratio of 0.40%, uses JPMorgan as its depository bank. Below is a chart of the exchange rate from British pound (GBP) to U.S. dollar (USD) over one year. The overall trend has been a strengthening in the pound versus the dollar.

However, keep in mind that this increase in the value of the British pound comes at a time of a weakening dollar and international volatility. Thus, interested investors are encouraged to do their own due diligence before investing in this fund.

Below is a chart of FXB’s one-year performance, which largely matches the performance of the GBP versus USD seen in the chart above. The fund is currently trading near its 52-week high and has returned 3.87% year to date.

For investors who believe in the strength of the pound sterling, I encourage you to look into the CurrencyShares British Pound Sterling Trust (FXB).

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Jim Woods

Jim Woods is a 20-plus-year veteran of the markets with varied experience as a broker, hedge fund trader, financial writer, author and newsletter editor. Jim is the editor of Successful Investing, the Bullseye Stock Trader, and The Deep Woods (formerly the Weekly ETF Report). His books include co-authoring, “Billion Dollar Green: Profit from the Eco Revolution,” and “The Wealth Shield: How to Invest and Protect Your Money from Another Stock Market Crash, Financial Crisis or Global Economic Collapse.” He’s also ghostwritten many books and articles, as well as edited content for some of the investment industry’s biggest luminaries. His articles have appeared on many leading financial websites, including StockInvestor.com, InvestorPlace.com, Main Street Investor, MarketWatch, Street Authority, Human Events and many others. Jim formerly worked with Investor’s Business Daily founder William J. O’Neil, helping to author training courses in the CANSLIM stock-picking methodology. The independent firm TipRanks rates Jim the No. 3 financial blogger in the world (out of more than 6,000). TipRanks calculates that, since 2012, he's made 361 successful recommendations out of 499 total, earning a success rate of 72% and a +15.3% average return per recommendation. He is known in professional and personal circles as “The Renaissance Man,” because his expertise includes such varied fields as composing and performing music; Western horsemanship, combat marksmanship, martial arts, auto racing and bodybuilding. Jim holds a BA in philosophy from the University of California, Los Angeles, and is a former U.S. Army paratrooper. A self-described “radical for capitalism,” he celebrates the virtue of making money from his Southern California horse ranch.