04/08/08 — FXCM, one of the largest Forex Dealer Members, recently introduced the Enhanced Dollar Index Programs. Theses programs, which use the DXY Index as a benchmark, let investors take a position based on the direction of the dollar without having to trade the dollar themselves, seeking to outperform the DXY Index.
The difference:
FXCM Enhanced Dollar Index Programs
• Actively adjusted weightings of currencies and leverage to take advantage of market conditions*
• Ability to switch between the Dollar Bull and Dollar Bear programs with no additional fees or commissions
Most ETFs and Currency Index Products
• Passive investment
• Fixed weightings of currencies and either unleveraged or set leverage
The FXCM Enhanced Dollar Index Programs were developed by the Systems Trading Desk at FXCM with direction from analysts at DailyFX.com. Using proprietary FXCM order-flow data, these actively managed programs are exclusively available through FXCM. The FXCM Enhanced Dollar Index Programs use sophisticated, back-tested strategies designed to minimize loss and aim to provide a higher return on investment than just directly investing in the Index alone.**
The FXCM Enhanced Dollar Index programs are different from other currency ETFs or currency futures indexes, which traditionally do not optimize their positions based on market conditions. The FXCM Dollar-Bull Index Account Program beat the DXY Index in 3 out of 5 years, and the FXCM Dollar-Bear Index Account Program beat the DXY Index in 4 out of 5 years.***
For more information on FXCM's Enhanced Dollar Index Programs, and to see past performance, please visit www.FXCM.com.
* Without proper risk management, Currency Trading has a high degree of leverage which can lead to large losses as well as gains.
** The Bull and Bear programs of the FXCM Enhanced Index Programs will perform contrary to each other as they seek to profit from opposing views of the dollar. Through the use of active strategies, the FXCM Enhanced Index Programs aim to bias returns to the upside, i.e., to provide larger gains if the currency in one program moves in its selected direction, while minimizing losses in the counter-program.
*** This claim is based on a comparison between the actual currency index and a retrospective, back-tested analysis of the FXCM Enhanced Index Programs during the relevant time period. Hypothetical performance results may have many inherent limitations, some of which are described in the risk warning. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program.
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