Guggenheim Partners, the money manager behind the $4 billion
S&P 500 Equal Weight ETF (NYSEArca:RSP), today is launching an
ETF focused on the Singapore dollar-U.S. dollar currency cross,
making it the ninth fund in its CurrencyShares lineup.
The CurrencyShares Singapore Dollar Trust (NYSEArca:FXSG) comes
with an annual fee of 0.40 percent, or $40 for each $10,000
invested, that accrues on a daily basis, according to regulatory
paperwork Guggenheim filed detailing the fund.
The company noted in the fund prospectus that the trust can be
used for expressing a view on the relative strength of weakness of
the Singapore dollar, to help international businesses hedge out
currency risks or that it could simply be added to a portfolio to
add an asset class with relatively low correlation to other asset
The CurrencyShares Singapore ETF holds actual notes of
currency-Singapore dollars in the case of FXSG-according to the
fund prospectus. That differs from other currency
, such as those marketed by WisdomTree that hold assets such as
short-term fixed-income securities and currency forwards.
The structure of exposure to currencies matters from a taxation
point of view.
Funds like WisdomTree's are registered under the Investment
Company Act of 1940, and are taxed much like equity funds, with the
difference of long- and short-term gains based on whether the
holding period is less than or more than a year.
Conversely, funds like FXSG are structured as grantor trusts. As
such, all such funds are taxed as ordinary income-with a maximum
rate of 39.6 percent-regardless of holding period. All these
distinctions and more are detailed in IndexUniverse's "2013
Complete Guide To ETF Taxation."
As noted, the Singapore ETF is the ninth fund in the
CurrencyShares family of funds. The other funds target the
- Australian dollar (NYSEArca:FXA)
- British pound sterling (NYSEArca:FXB)
- Canadian dollar (NYSEArca:FXC)
- Chinese Renminbi (NYSEArca:FXCH)
- Euro (NYSEArca:FXE)
- Japanese yen (NYSEArca:FXY)
- Swedish krona (NYSEArca:FXS)
- Swiss franc (NYSEArca:FXF)
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