ETF Securities ZUSD ETF (ASX:ZUSD)
The ETFS ZUSD ETF provides investors with exposure to the performance of the US dollar – specifically interest-bearing US dollar cash deposits.
What does the ZUSD invest in?
The ZUSD ETF invests in US dollar bank deposits with maturities ranging from overnight to three months. Deposits are held with one or more authorised deposit taking institutions and earn a variable rate of interest spread across a range of maturities to enhance yield. Investors in ZUSD would expect to benefit from rising US dollar interest rates and from an appreciation of the US dollar against the Australian dollar.
What do investors use ZUSD for?
The ZUSD ETF could be used by investors to get exposure to a yield that is typically higher than Australian cash alternatives, as US dollar interest rates have historically been above Australian dollar interest rates. ZUSD could also be used as a hedge since investors often seek haven in the ‘greenback’ in times of uncertainty. Additionally, investors could use ZUSD to profit from a view that the US dollar will strengthen relative to the Australian dollar, or to hedge against US dollar currency risk for those who primarily invest in ASX shares that earn revenue in Australian dollars.
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