In terms of the nominal GDP China is the global second largest economy and it is also the world's most populous nation. Moreover, China is the world's largest trading power. In recent years, China’s economy has become a potential market for many new investments. Therefore, a lot of investors are closely watching its currency. The currency abbreviation for the China’s Yuan is CNY. Chinese currency official name is Renminbi with Yuan as its basic unit. Chinese Yuan is issued by the People's Bank of China. The easiest way to invest in Chinese currency is through Exchange Traded Funds. There are several Chinese currency ETFs on the market. Investing through such ETFs provide exposure to the Chinese currency and give diversification possibilities. Generally, such ETFs take the Chinese Yuan against the U.S. Dollar. If the Chinese currency rises during the holding period versus the U.S. securities, the position creates a profit that is then reflected in the Exchange Traded Fund’s price. Since 2009 the Chinese government had limited currency controls and the Chinese Yuan has become more accessible for the international traders. There is of course an investment risk tied with the Chinese Yuan ETFs. Currency moves are unpredictable and currency fluctuations may have a negative impact on portfolio returns. Nevertheless, investing in currency Exchange Traded Funds may be an effective and easy way for retail investors to hedge the exchange risk.
CNY - USD, Chinese Yuan, Actively Managed ETF is in the medium-term down -6% in 1 year.