The PowerShares DB 3X Short US Dollar Index Futures ETN Down 31% in 2014
The PowerShares DB 3X Short US Dollar Index Futures ETN (NYSEArca: UDNT) is a leveraged exchange traded note that seeks to match 300% of the inverse monthly performance of the Deutsche Bank Long US Dollar Futures Index (USDX). In other words, the fund attempts to move three times as much as the index in the opposite direction on a monthly basis. The underlying assets of USDX measure the performance the US Dollar against a combination of six major world currencies: the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona, and Swiss Franc.
In 2014, shares of UDNT were down 31.19% for the year due to the US Dollar significantly appreciating versus most world currencies.
Leveraged ETNs are specifically structured for traders looking to time the market and realize short-term profits based on the underlying index making single-day moves. Leveraged ETNs are generally not suitable for long-term investors, as the investment will ultimately lose value or significantly underperform, over a longer term, compared to its stated objective. In fact, Direxion Funds, a leader in leveraged ETFs, puts this disclosure in bold print on its web-page for each of its leveraged funds: “The fund should not be expected to provide [the multiple] times the return of the benchmark’s cumulative return for greater than a day.” Therefore, these leveraged funds are highly unsuitable for long term investors.
If your financial advisor or stockbroker recommended that you invest in the PowerShares DB 3X Short US Dollar Index Futures ETN, you may have options to recover your investment loss. If your advisor failed to fully disclose the risks of investing in the PowerShares DB 3X Short US Dollar Index Futures ETN, then you may have a claim for misrepresentation. If your investment objective was to only invest in safe and stable investments, you may have a claim for unsuitability. If the PowerShares DB 3X Short US Dollar Index Futures ETN made up a large portion of your portfolio, then you may have a claim for over-concentration and lack of diversification. If your advisor purchased this fund without your knowledge, you may have a claim for unauthorized trading. If your advisor purchased this fund on margin, you may have a claim for excessive use of margin and negligence.
The attorneys at Carlson & Associates, P.A., located in Miami, Florida, represent investors who have lost money due to the improper conduct of financial advisors. If you would like to have a free consultation, we can be reached at (305) 372-9700 to discuss your options.