Currency Harvest ETF Looks Promising

The Powershares G10 Currency Harvest Fund (DBV - PDF Fact Sheet) has steadily gathered assets and has performed very well so far this year with a YTD return of 13.22%.


Here's the definition of what the fund does from the PowerShares website:

The Index is comprised of currency futures contracts on certain G10 currencies and is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates. The G10 currency universe from which the index selects currently includes U.S. Dollars, Euros, Japanese Yen, Canadian Dollars, Swiss Francs, British Pounds, Australian Dollars, New Zealand Dollars, Norwegian Krone and Swedish Krona.

The current portfolio is long the Aussie Dollar, New Zealand Dollar and British Pound and short the Japanese Yen, Swedish Krona and Swiss Franc:
Throughout the year, the weightings of each commodity component in the Index will naturally change based on changes in the underlying futures prices. The Fund's underlying holdings are rebalanced to the Index's base weights.

What I find particularly attractive about the index performance is that it has performed very well in tough years for the stock market and it only has one negative year on its record:


We are continually evaluating new ETF offerings, and this is another example of a fund that appears to offer good currency exposure for buy and hold investors with limited tolerance for volatility.

Market Selloff and NYSE Trading Collars

Dramatic down days in the market are intriguing for several reasons. First of all because it gives us a glimpse into the psychology of the markets and how interconnected markets from around the world have become. Second of all it gives us a little bit of information about some of the structures of the markets that we usually don't even think about.

For those of you who are reading articles about why the market dropped off today you may have come across the term "trading collars." Check out the rules the NYSE has in place to prevent dramatic declines and dramatic increases in the markets:


These rules are in place to keep the markets orderly. The trading collars were implemented around 3PM this afternoon. No doubt today was a hectic day on Wall St. Today is precisely the kind of day that reminds me why I have no interest in being a trader!