These shares, called CurrencyShares, track their prices based on international currencies that fund them, which include the Australian dollar, British pound sterling, Canadian dollar, Mexican peso, Swedish Krona and the Swiss franc, according to a company news release.
Rydex is offering six new trusts. Each ETF share is worth about 100 units of the foreign currency, and they are held in an interest-bearing account with JPMorgan Chase, the trusts’ depository, according to a news release. The interest is equivalent to that currency’s overnight bank rate.
Shares of the Mexican peso and Swedish krona trusts will represent about 1,000 units of currency, and shares of the other trusts represent about 100 units of currency each, according to the news release.
In this initial offering, specialists can purchase the shares directly from the trusts in large blocks, also known as “baskets,” according to the news release. In the future, authorized participants may sell CurrencyShares based on the market price of the underlying currencies, the current CurrencyShares’ trading price, and other price-determining factors.
Rydex Specialized Products sponsors the trusts, Rydex Distributors distributes them, and the Bank of New York is the trustee, according to the news release.