Guggenhiem’s CurrencyShares launches Singapore dollar ETF

Feb 13th, 2013 | By | Category: Alternatives / Multi-Asset

Guggenheim Investments, the US-based firm behind the CurrencyShares brand, has announced the launch of the CurrencyShares Singapore Dollar Trust (FXSG), an exchange-traded fund (ETF) tracking the Singapore dollar.

Guggenhiem’s CurrencyShares launches Singapore dollar ETF

The NYSE Arca-listed CurrencyShares Singapore Dollar Trust (FXSG) provides pure exposure to the Singapore dollar by holding actual foreign currency deposits.

Listed on the NYSE Arca and with an annual expense ratio of 0.40%, the ETF seeks to provide institutional and retail investors with a cost-effective way to gain exposure to the Singapore dollar.

The unique CurrencyShares structure provides pure exposure to the Singapore dollar by holding actual foreign currency deposits, not derivative instruments, while also delivering many of the benefits typically associated with ETFs, namely transparency, tax efficiency, trading flexibility, accessibility and liquidity.

“We’re pleased to continue to expand our CurrencyShares line-up, and believe that the short-term tactical and long-term strategic opportunities in Singapore make it attractive,” said William Belden, managing director and head of product development at Guggenheim Investments. “CurrencyShares Singapore Dollar Trust provides investors an opportunity to potentially capitalise from the Singapore economy and positive movement in the Singapore dollar.”

Singapore, often referred to as the “Switzerland of Asia,” is a major banking centre that attracts wealth from across the Asia-Pacific due to its independence and solid financial balance sheet. Additionally, Singapore has a strong economy with a real growth rate of 4.9% in 2012, and is one of only two Asian-Pacific countries to have AAA credit ratings (Australia is the other) from the major credit rating agencies.

The currency market, one of the largest and most liquid with $4 trillion traded daily, can provide investors a way to diversify cash allocations and hedge exposure to certain markets. Currency, when used as an asset class, also has the potential to offer low correlations to equity and fixed income asset classes, which may help lessen portfolio volatility.

Guggenheim Investments is a leader in currency products and launched the US’s first currency exchange-traded product – CurrencyShares Euro Trust (FXE). The firm offers the industry’s largest line-up of currency ETPs, which consists of nine currency products with a combined $1.9 billion of assets, as of year end 2012.

The CurrencyShares exchange-traded product is not the first to track the Singapore dollar. Deutsche Bank’s db-X trackers unit launched the db x-trackers II Singapore Dollar Cash UCITS ETF (XSGO) on the Singapore Exchange (SGX) in March 2010. This synthetically-replicated product tracks the Deutsche Bank SORA Total Return Index, an index reflecting a daily rolled deposit earning Singapore Overnight Rate Average, the short-term money market reference rate for transactions in Singapore dollars in Singapore.

For interested parties, the db-X product is registered for distribution across much of Europe, including the UK, and is eligible for ISAs and SIPPs and has UK Fund Reporting Status. The fund has a total expense ratio (TER) of 0.15%.

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