Longtime readers of this blog have noted our skepticism of the many new narrowly defined, me-too exchange traded funds that have reached the market. Random Roger who has been writing about the benefits of broad diversification and currency exposure, points out an article over at IndexUniverse.com that lays out the details of a new currency ETF. The DB Currency Index Value Fund (DBV) "…is a hedge fund … just one that follows a pre-set, automated, index-based trading strategy."

We point you to the IndexUniverse site to read all the details, but suffice it to say that this fund is innovative, rather than being me-too. The fund will attempt to exploit the long-standing observation that high yielding currencies tend to outperform, net-net, low yielding currencies. The failure of the concept of "uncovered interest rate parity" to hold remains an academic sticking point.

They note that the fund is at this point only in registration and will have a steep learning curve. However this represents a unique opportunity. Sure an individual investor could replicate the strategy with some effort, however in this case the scale of the fund will make the build vs. buy decision pretty easy. We will be watching this fund closely as it nears approval and launch. Stay tuned.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.