5 min read
By Ron Koren, ETF Insider


Exchange-Traded Funds (ETFs) have revolutionized the investment landscape by providing investors with an opportunity to diversify their portfolios across various sectors and asset classes. In this article, we will conduct a comprehensive analysis of two prominent ETFs: UDN (Invesco DB US Dollar Index Bearish ETF) and FXA (Invesco CurrencyShares Australian Dollar Trust). We will delve into key aspects such as ETF tickers, full names, issuers, sectors, top holdings, capitalization, strategy, tracking, and exposure.

UDN Vs FXA: Overview

UDN and FXA are two ETFs that focus on currency exchange rates, specifically the US dollar and the Australian dollar. While UDN is designed to track the inverse performance of the US Dollar Index, FXA aims to mirror the Australian dollar's price against the US dollar. These ETFs present distinct opportunities for investors to gain exposure to currency fluctuations and make informed investment decisions.

UDN Vs FXA: Tickers and Full Names

The ETF ticker symbols serve as shorthand for each fund and provide quick identification. UDN, with its ticker symbol, represents the Invesco DB US Dollar Index Bearish ETF, which indicates its inverse relationship with the US Dollar Index. On the other hand, FXA, denoting the Invesco CurrencyShares Australian Dollar Trust, signifies its focus on tracking the Australian dollar's performance. These tickers offer an instant reference point for investors seeking exposure to these specific currencies.

UDN  overlap UDN VS FXAUDN overlap UDN VS FXA

UDN Vs FXA: Issuers

Both UDN and FXA are managed and issued by Invesco, a well-known global investment management company. As reputable issuers, Invesco provides investors with a level of confidence in the ETF's management, strategy, and performance. Understanding the issuer's reputation and track record can play a crucial role in building trust and informing investment decisions.

UDN Vs FXA: Sectors and Top Holdings

While traditional ETFs often focus on sectors like technology, healthcare, or energy, UDN and FXA belong to the unique category of currency ETFs. UDN's primary holdings include short US dollar futures contracts, designed to profit from a potential decline in the US Dollar Index. FXA, on the other hand, invests in Australian dollar deposits and seeks to provide exposure to the Australian dollar's movement. Evaluating the sectors and top holdings helps investors understand the underlying assets and strategies of these currency-focused ETFs.

UDN Vs FXA: Capitalization and Strategy

The assets under management (AUM) of an ETF can provide insights into its popularity and potential liquidity. UDN's AUM reflects investor interest in gaining exposure to a weakening US dollar, while FXA's AUM indicates demand for Australian dollar exposure. The strategies of these ETFs—inverse tracking and direct currency tracking—have implications for risk and return. Investors should consider their own views on currency movements and economic factors before making investment decisions.

UDN Vs FXA: Tracking and Exposure

UDN achieves its objective of inverse tracking by using short US dollar futures contracts to profit from a potential decline in the US Dollar Index. FXA directly tracks the Australian dollar's performance against the US dollar. Both ETFs use different approaches to achieve their objectives, with UDN aiming to benefit from a falling US dollar and FXA providing a means to participate in the Australian dollar's movements.


In summary, UDN and FXA represent two distinct approaches to gaining exposure to currency fluctuations, specifically the US dollar and the Australian dollar. Understanding their tickers, issuers, sectors, top holdings, capitalization, strategies, tracking methods, and exposures is essential for investors seeking to incorporate currency-related investments into their portfolios. For those interested in diving deeper into these ETFs' holdings, correlations, overlaps, and various insights, ETF Insider offers an exceptional tool. This user-friendly app provides extensive details on these and other financial instruments, empowering investors to make well-informed decisions.

Disclaimer: This article is provided for informational purposes only and does not offer any investment advisory services. It's important for readers to conduct thorough research and consult with financial professionals before making investment decisions.


https://www.invesco.com/ FXA ETF issuer
https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&ticker=FXA FXA ETF official page

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  • Why is UDN better than FXA?

    UDN may be considered better than FXA for some investors due to its specific focus, offering diversification.

  • Does FXA beat UDN?

    FXA's performance relative to UDN will vary over time, depending on market conditions.

  • Should I invest in UDN or FXA?

    The choice between UDN and FXA should align with your investment goals, risk tolerance, and desired exposure.

  • Are UDN and FXA good investments?

    Both UDN and FXA can be suitable investments depending on individual investment strategies, goals, and risk profiles.

  • What is the correlation between UDN and FXA?

    The correlation between UDN and FXA can vary over time, reflecting differences in performance.