5 min read
By Ron Koren, ETF Insider


Exchange-Traded Funds (ETFs) have become increasingly popular among investors seeking exposure to foreign currencies. In this article, we will conduct an in-depth comparison between two prominent currency ETFs: FXA (Invesco Australian Dollar Trust) and UDN (Invesco DB US Dollar Index Bearish Fund). We'll explore various aspects, including ETF tickers, full names, issuers, sectors, top holdings, capitalization, strategy, tracking, and exposure.

FXA VS UDN: Overview

FXA and UDN are both currency ETFs, but they serve different purposes. FXA tracks the Australian Dollar (AUD), offering investors exposure to the currency's movements. In contrast, UDN takes a bearish stance on the US Dollar (USD) by attempting to profit from its depreciation relative to a basket of other major currencies. This fundamental difference in focus leads to distinct investment outcomes, which we will examine in detail.

FXA VS UDN: ETF Tickers and Full Names

Understanding the tickers and full names of these currency ETFs is essential for investors. FXA's ticker symbol is self-explanatory, representing its focus on the Australian Dollar. Its full name, "Invesco Australian Dollar Trust," further clarifies its objective. On the other hand, UDN's ticker symbol might not immediately reveal its purpose. UDN stands for "US Dollar Index Bearish Fund," reflecting its strategy to profit from a declining US Dollar. Knowing these details can help investors make informed decisions based on their currency outlook.

FXA overlap FXA VS UDNFXA overlap FXA VS UDN

FXA VS UDN: Issuers

Both FXA and UDN are managed by Invesco, a reputable financial institution known for its diverse range of ETFs. Understanding the issuer's reputation and expertise in managing currency ETFs is crucial for investors looking to gain exposure to foreign currencies with confidence.

FXA VS UDN: Capitalization and Strategy

The capitalization and strategy of these currency ETFs play a significant role in their performance and risk profile. FXA's capitalization reflects its popularity and the amount of assets it manages in Australian Dollars. On the other hand, UDN employs a bearish strategy, which means it aims to profit when the US Dollar weakens relative to other currencies. This strategy inherently involves risks and rewards distinct from FXA's approach. Investors should carefully consider their currency outlook and risk tolerance when choosing between these two ETFs.

FXA VS UDN: Sectors and Top Holdings

Currency ETFs do not have traditional sectors or top holdings like equity ETFs. Instead, their performance is tied to the currency they track. FXA's performance correlates with the Australian Dollar's movement against other currencies, while UDN's performance is inversely related to the US Dollar's performance. Investors should focus on their currency outlook and investment goals when evaluating these ETFs.

FXA VS UDN: Tracking and Exposure

FXA and UDN have distinct tracking and exposure methods. FXA aims to closely track the movements of the Australian Dollar by holding Australian Dollar-denominated assets. In contrast, UDN tracks the US Dollar's performance relative to a basket of major currencies through financial instruments like futures contracts. Understanding these tracking and exposure methods is vital for investors to align their ETF choice with their currency views.


FXA and UDN are unique currency ETFs, each offering a specialized approach to currency investing. For those seeking to delve deeper into currency holdings, correlations, overlaps, and other insights, ETF Insider is the ultimate tool to explore. With a user-friendly app, it provides extensive details on these and other financial instruments.

Disclaimer: This article does not provide any investment advisory services. It is essential to consult with a financial professional or conduct thorough research before making any investment decisions related to currency ETFs or any other financial instruments.

FXA ETF issuer
FXA ETF official page

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