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If you’re getting a little queasy about the sagging U.S. dollars in your savings account, join the club.
With deficits high and interest rates low, one potential outcome is high inflation, which would eat away at the value of the greenback.
Now it seems banks are sharing the unease: They’re putting almost two-thirds of their new cash into the euro and the Japanese yen, according to Barclay’s Capital. Compare that to a decade ago, when it was the U.S. dollar that garnered two-thirds of that cash. Global reserve currency? Not so much.So what’s an investor to do about the shakiness of the dollar? Enter currency exchange-traded funds (ETFs), which let even casual investors put a little foreign spice in their cash holdings. There are now a total of 35 on the market, covering everything from the Indian rupee to the Brazilian real.
Other People's Money“What currency ETFs provide are democratization,” says Bradley Kay, an ETF analyst with research firm Morningstar. “Previously foreign currencies were largely inaccessible to individuals, because of things like minimum investments. ETFs have opened that all up.”
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