1-Star ETFs Poised to Plunge: PowerShares DB US Dollar Index Bearish?

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, the PowerShares DB US Dollar Index Bearish Fund (NYSEMKT: UDN  )  has received the dreaded one-star ranking.

With that in mind, let's take a closer look at UDN, and see what CAPS investors are saying about the ETF right now.

UDN facts

   

Inception

February 2007 

Total Net Assets

$98.3 million

Investment Approach

Seeks to track the price and yield performance of the Deutsche Bank Short US Dollar Futures Index. The index is comprised solely of short futures contracts. The futures contract is designed to replicate the performance of being short the US Dollar against the Euro, Japanese Yen, British Pound, Canadian Dollar, Swedish Krona and Swiss Franc.

Expense Ratio

0.75%

1-Year / 3-Year / 5-Year Returns

(0.4%) / 0.6% / (0.3%)

Alternatives

CurrencyShares Euro Trust 

iPath EUR/USD Exchange Rate ETN

WisdomTree Euro Debt

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 35% of the 79 All-Star members who have rated UDN believe the ETF will underperform the S&P 500 going forward.

Earlier this week, one of those Fools, TerryHogan, cautioned our community about getting too bullish on UDN:

I think what the green-thumbers don't understand is that this should not be purchased as a long-term bet on the dollar. The way this has to deal with futures contracts makes it a losing proposition except for a basically straight down market with declining futures prices.

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