by Cinthia Murphy

United States Commodity Funds, the firm behind the $1.25 billion U.S. Oil Fund (NYSEArca: USO), filed paperwork with U.S. regulators to market its first currency fund, this one a futures-based currency ETF that would serve up exposure to a basket of five currencies at a time.

The U.S. Golden Currency Fund (NYSEArca: HARD) is a commodity pool comprised of futures contracts that represent equally weighted interest in five hard currencies that are widely used, easily exchangeable and issued by an economically strong country, the company said. The portfolio, which is rebalanced monthly, will have an estimated annual fee of 0.85 percent, including 0.60 percent in management fees.

The base currency for the strategy is the U.S. dollar, and therefore the dollar is not eligible to be one of the five currencies in the mix, the prospectus said.

Instead, the fund will select its exposure annually from the 25 most actively traded global currencies as measured every three years by the Bank of International Settlement currency trading report, the filing said. The latest BIS list, which was published in 2010, had the U.S. dollar, the euro, the Japanese yen, the British pound, the Australian dollar and the Swiss franc at the top. Continue reading →