WisdomTree, Dreyfus to offer five currency ETFs
NEW YORK, May 1 (Reuters) - WisdomTree Investments Inc (WSDT.PK) and The Dreyfus Corp said on Thursday they plan to launch five currency income exchange-traded funds that will be listed on the all-electronic NYSE Arca stock exchange.
Set to begin trading on May 13, the new ETFs will seek to earn current income similar to money market rates in China, India, Brazil, Japan and the euro zone.
The ETFs will offer the opportunity to profit both from currency fluctuations and investments in short-term investment grade securities.
The ETFs will not track a specific index but instead will be actively managed.
The announcement said the funds will differ from money market funds, which seek to maintain a constant share price.
"Certainly in a case like China it is much more a currency plan than a yield play," Bruce Lavine, president and chief operating officer of WisdomTree, said in a telephone interview.
The ETFs also offer a chance to earn yields that are higher than those available in the United States.
In the case of India, Brazil and China, the yields on the ETFs may differ from yields available locally due to restrictions on foreign investors.
With U.S. investors showing a strong appetite in recent years for foreign markets, the ETFs offer a way to hedge currency risk.
A U.S. investor with foreign holdings benefits from a falling dollar and is hurt by a rising dollar.
"If you like stocks and believe the dollar is ready to turn, you can hold the stocks and take out a lot of the currency risk," Lavine said.
The new ETFs and their ticker symbols are the WisdomTree Dreyfus Chinese Yuan Fund (CYB.P), the Indian Rupee Fund (ICN.P), the Brazilian Real Fund (BZF.P), the Japanese Yen Fund (JYF.P) and the Euro Fund (EU.P).
New York-based WisdomTree manages more than $4.6 billion in ETF assets.
Dreyfus is part of BNY Mellon Asset Management, which is in turn part of Bank of New York Mellon Corp (BK.N). (Reporting by Cal Mankowski; Editing by Dan Grebler)
