As the U.S. dollar gains against other major currencies, UUP will rise. Beware, as values of stocks within a portfolio containing a range of foreign stocks can be negatively impacted. The UUP ETF will track the rise of the dollar against the foreign countries that are invested in. Through UUP, investors can realize the return from a negative currency exchange, and in general, lower the effects of increased volatility for the currency exchanges in their ETFs holding foreign assets.

But that’s not all - favorable currency exchanges have helped U.S. investors. The return on any foreign asset is equal to the price return plus any fluctuations from currency exchanges.

When looking to access these foreign markets through ETFs, there are two things to consider:

• The return from underlying assets
• The return given by the currency exchange

Waller notes some exceptions, which include funds that invest in dollar denominated soverign debt.