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Dollar Bullish Fund Returns to ETF Behavior

By Don Dion

 About this article:
 Just one week after dollar bulls forced a halt in the creation of the PowerShares DB US Dollar Index Bullish Fund, the provider received the SEC's blessing to issue 100 million additional shares, thus recommencing its creation. Prior to getting the regulatory go-ahead, UUP was effectively turned into a closed-end fund. Like U.S. Natural Gas, UUP risked running up a high premium caused by the fund's market price diverging from its net asset value. Luckily for investors, in UUP's short time acting as a closed-end fund, it failed to gain a double-digit premium as UNG did prior to its SEC share-issuance approval this summer. However, on Friday, the fund declined more, because of the loss of the premium. UUP declined 2.1%, but the inverse, PowerShares DB US Dollar Index Bearish Fund, gained only 0.6%. With the premium gone, investors can focus on the merits of...

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