This is a currency ETF that seeks to profit when the US dollar strengthens against a basket of major developed-market currencies such as the euro and yen. It tracks dollar index futures, so its value rises when the dollar strengthens and falls when the dollar weakens.

It suits investors who want to bet on dollar strength or diversify the currency risk of their existing holdings.

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

The fund tracks dollar index futures so that it is exposed to dollar strength against a basket made up of major developed-market currencies such as the euro, yen and pound. Its value rises when the dollar strengthens against the basket and falls when the dollar weakens. Because it offers exposure to a currency asset that behaves differently from stocks and bonds, it is used for currency diversification and as a tool for exchange-rate strategies.

• Exposure to dollar strength against a basket of major currencies
• Tracks dollar index futures

Assets under management (AUM) are $483.2M, and the total expense ratio is 0.78% per year.

The main point of comparison is its basket of major developed-market currencies, versus other currency ETFs or dollar strength products that also include emerging-market currencies.

The dollar is driven by interest rate differentials between the US and other countries, demand for safe havens and monetary policy. It tends to strengthen when US rates are relatively high or risk aversion rises, and to weaken in the opposite environment. As a currency asset, it moves differently from stocks and bonds.

Fund flows into currency products shift with interest rate differential outlooks, risk appetite and monetary policy expectations, and money sometimes moves into related products when expectations of dollar strength grow. It is also worth noting that performance can vary widely depending on rate gaps between the US and other countries and on policy changes.

Its strengths are exposure to dollar strength and currency diversification, while the considerations are the risk of dollar weakness, exchange-rate volatility and the lack of interest income.

For dollar strength exposure that also includes emerging-market currencies, direct substitutes include USDU. Conversely, to bet on dollar weakness, products such as UDN are also worth comparing. For exposure to the euro, products such as FXE can be considered as well. What differentiates this ETF is its exposure to dollar strength against a basket of major developed-market currencies.

Here are the points to check before investing in UUP. Exposure to dollar strength is the appeal, but the risk of dollar weakness, exchange-rate volatility and the lack of interest income should be confirmed in advance. It is also a good idea to compare it with other currency products and dollar weakness products.

The main variable for performance is dollar weakness resulting from a narrowing of interest rate gaps between the US and other countries and improving risk appetite. As a currency asset, the fund relies 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 to bet on dollar strength or diversify currency risk. It is advisable to compare and choose among products such as USDU if you want to include emerging-market currencies, UDN if you want to bet on dollar weakness, and this product if you want exposure to dollar strength against major currencies.