For clients who want to diversify currency exposures, developed markets currently don't offer many attractive choices.

Emerging markets have higher interest rates and growth prospects, both of which are positive for currencies. But not everyone has the time or skill to trade emerging market currencies in spot, futures or forward markets.

A simpler way to gain broad exposure to emerging market currencies is to invest in an emerging market bond mutual fund or ETF. In addition to yield and any price appreciation, the fund will profit to the extent that emerging market currencies strengthen vs. the dollar. Focus on funds that, by objective, do not hedge foreign currency risk. One new ETF that invests in unhedged emerging market bonds and local currencies is Van Eck's Market Vectors EM Local Currency Bond ETF (EMLC).

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