The firm says the currencies are traditionally difficult for non-domestic investors to access and the new launches will suit clients looking to diversify their portfolio with an asset class lowly correlated to equities and bonds or those looking to capitalise on opportunities in the forex market.
Four emerging market and 18 sterling based currency ETCs will launch on the London Stock Exchange in the coming weeks. They are designed to replicate a fully collateralised long or short investment in either deliverable forward contracts or non deliverable forward contracts and will be fully collateralised in order to mitigate counter-party risk.
Chief operating officer Nik Bienkowski says: “Currencies are driven by the macro environment which has shown high volatility in the past few years, and because currencies are valued relative to other currencies, therefore if one goes up then the other must go down. Thus depending on whether an investor has gone long or short, an investor can potentially profit regardless of market direction”.