Do I like exchange-traded funds (ETFs)? Based on how much I write about them, I’d say that’s a clear yes. But are they perfect as market-trackers? No way. And with the U.S. dollar showing signs of potential upside down markets, while ETFs might be a good vehicle to play it, that’s not where I’m going to chart the course.
Case in point: Here’s the Invesco DB US Dollar Index Bullish Fund (UUP). It has been a reliable tracking device for the U.S. Dollar Index ($DXY), a trade-weighted basket of currencies, since 2007. However, it pays distributions from time to time, and that can mess up the charting. See the recent gap associated with the last one.
