This is a currency ETF that tracks the euro's exchange rate against the US dollar. The trust holds euro deposits and follows the value of the euro converted into dollars. Its value rises when the euro strengthens and falls when the euro weakens.

It suits investors who want direct exposure to the euro or want to take advantage of euro-dollar exchange rate movements.

It is a passively managed (index-tracking) ETF operated by Invesco.

The trust holds euro deposits and tracks the euro's exchange rate against the US dollar. Its value rises when the euro strengthens against the dollar and falls when it weakens. Because it gives exposure to an exchange rate asset that differs from stocks and bonds, it is used as a means of currency diversification or of capitalizing on exchange rate movements.

• Direct exposure to the euro's exchange rate against the dollar
• A currency asset that differs from stocks and bonds

Assets under management (AUM) are $330.8M, and the expense ratio is 0.40% per year.

Compared with other currency ETFs and dollar-strength products, the main points of comparison are the currency of exposure and the direction of the bet.

The euro is driven by the interest rate gap between the US and the eurozone, risk appetite, and monetary policy. When eurozone rates are relatively higher or risk appetite improves, the euro tends to strengthen, and in the opposite phase it tends to weaken. Because the fund earns no interest income, exchange rate movements translate directly into performance.

Fund flows into currency products diverge depending on the outlook for rate differentials, risk appetite, and monetary policy expectations, and money may also move in response to bets on the euro's direction or demand for currency diversification. It is also worth noting that performance can vary widely depending on changes in the US-eurozone rate gap and in policy.

Its strengths are direct euro exposure and currency diversification, while exchange rate volatility, the lack of interest income, and dependence on rate differentials are considerations.

For exposure to the Swiss franc, FXF is a direct alternative, and for exposure to the British pound, products such as FXB are also worth comparing. Conversely, to bet on dollar strength, a product such as UUP can be considered alongside. What differentiates this ETF is its narrow exposure to the euro's exchange rate against the dollar.

Here are the points to review before investing in FXE. Euro exposure is the appeal, but exchange rate volatility, the lack of interest income, and dependence on rate differentials should be confirmed in advance. It is also advisable to compare it with other currency and dollar products.

Euro weakness driven by changes in the US-eurozone rate gap and by monetary policy is the main variable for performance, and because this is a currency asset, it depends only on exchange rate movements, without interest or dividends. Exchange rates can be highly volatile depending on policy and market conditions.

It is a suitable candidate for investors who want direct exposure to the euro or want to take advantage of euro-dollar exchange rate movements. To gain exposure to other currencies, it is advisable to compare products such as FXF or FXB, and if you want euro exchange rate exposure, to compare this product alongside them before choosing.