Forex Capital Markets (FXCM) recently unveiled a product that represents a viable alternative to currency exchange trade funds. A currency ETF is "index-passive" because it is linked to an index and rises and falls in line with the value of the currency with which it is associated.  FXCM’s Enhanced Dollar Index programs, however, are "actively managed" and  aim to capture all of the upside of currency movements with only some of the downside. This is achieved through sophisticated trading algorithms that combine a leveraged index approach with market timing and directional investing. To explain in more concrete terms, a leveraged investment in a Dollar ETF would yield an above-market return if the ETF appreciates, but a proportionately below-market return if the ETF loses value.  The Enhanced Dollar Index Program, in contrast, would yield the same above-market return in the first scenario but a smaller loss in the second scenario.

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