Safe-haven ETFs benefit from global turmoil

Riskier assets show recovery today as hopes rise of peaceful resolution to Ukraine crisis

Safe-haven ETFs benefit from global turmoil

iNVEZZ.com Tuesday, March 4: Precious metals miners were the only stocks sought after by the bulls yesterday as investors abandoned equities for safer havens. In times of global turmoil, investors turn to assets like the Japanese yen, US dollar, US Treasuries and gold bullion and “investors turned to classic safe havens amid heightened tensions in Ukraine,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

CurrencyShares Japanese Yen Trust (NYSEArca:FXY)

The CurrencyShares Japanese Yen Trust rose by 0.40 percent yesterday, closing at $96.30 in New York after the yen surged to a one-month high against the US dollar. The ETF is expected to give up its gains today though, with the yen weakening following Russian President Vladimir Putin’s statement that there was no immediate need to send troops into Ukraine. Japan’s currency dropped versus all of its 16 major counterparts.

“We’re seeing something of a reversal of yesterday so stocks are higher and the moves in dollar-yen and euro-Swiss are consistent with that,” observes Jeremy Stretch, head of currency strategy at Canadian Imperial Bank of Commerce. “Russian military exercises are being completed for now. We remain susceptible to headline risk.”

The FXY is an exchange-traded fund designed to track the price of the Japanese yen. It has total assets of $187 million (₤112 million) and a 0.40 percent expense ratio.

US Treasuries and US dollar ETFs

Global uncertainty has also pushed investors towards the relatively safe US Treasuries, boosting the US dollar. As well, the greenback has found support in solid US factory and consumer spending reports. The US Commerce Department yesterday reported that personal spending rose 0.4 percent in January, beating consensus forecasts for a 0.1 percent increase. Personal income rose 0.3 percent, above expectations for a 0.2 percent increase.

The iShares 20+ Treasury Bond ETF (NYSEArca:TLT) and the iShares 7-10 Year Treasury Bond ETF (NYSEArca:IEF) yesterday gained 0.67 percent and 0.49 percent respectively. The 20+ years bond ETF erased its gains in pre-market trading today, falling by 0.68 percent to $108.29. You can read more on the recent performance of bond ETFs at (iShares bond ETFs see massive inflows in February).

The PowerShares DB US Dollar Index Bullish Fund (NYSEArca:UUP), which tracks the performance of the greenback against the yen, pound, euro, Swedish krona, Swiss franc and Canadian dollar, yesterday rose 0.37 percent to $21.46.

As of 12.30 UTC buy CurrencyShares Japanese Yen Trust at $96.31.

As of 12.30 UTC sell CurrencyShares Japanese Yen Trust at $96.29.

As of 12.30 UTC buy iShares 20+ Treasury Bond ETF at $109.04.

As of 12.30 UTC sell iShares 20+ Treasury Bond ETF at $109.02.

As of 12.30 UTC buy iShares 7-10 Year Treasury Bond ETF at $102.82.

As of 12.30 UTC sell iShares 7-10 Year Treasury Bond ETF at $102.80.

As of 12.30 UTC buy PowerShares DB US Dollar Index Bullish Fund at $21.47.

As of 12.30 UTC sell PowerShares DB US Dollar Index Bullish Fund at $21.45.

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