FXC vs USDU

FXCCInvesco CurrencyShares Canadian Dollar Trust

USDUCWisdomTree Bloomberg U.S. Dollar Bullish Fund

In short

FXC The plain-vanilla loonie trade: FXC holds actual Canadian dollars in a London bank account, no futures, no swaps, and has done it that way since 2006. A foreign-currency account you can buy in a brokerage window.

USDU Betting on the buck, but broadly: USDU is actively managed against a dollar basket spanning developed and emerging-market currencies, weighted by market liquidity and trade flows with the US, with short-term Treasuries as collateral.

Stated mandate

FXC The Trust seeks to reflect the U.S.-dollar price of the Canadian Dollar, plus any accrued interest and after Trust expenses. It is intended to provide a direct, cost-effective way to obtain investment exposure similar to holding Canadian Dollars.

USDU The Fund seeks total returns before fees and expenses that exceed the Bloomberg Dollar Total Return Index and provides broad exposure to the U.S. dollar against a basket of foreign currencies.

Why people hold it

• FXC Physically backed: real Canadian dollars sit in a JPMorgan Chase London deposit account, no derivatives involved, with the trust's holdings posted every business day.sec.gov
• Trading since 2006 and built for one job: exposure similar to holding Canadian dollars, without opening a separate currency account.
• The cash can earn interest. It accrues daily on the trust's primary deposit account, and the trust distributes monthly.sec.gov
• Fee sits at 0.40% a year, even with the median single-currency fund. Nobody in this corner is undercutting anybody.

• USDU The basket reaches past the usual majors into emerging-market currencies, picked for liquidity and their countries' trade flows with the US, and reweighted once a year.sec.govbbhub.io
• Dollar exposure is built with short-dated currency forwards; the portfolio itself holds Treasury bills, money market instruments and cash equivalents.sec.gov
• The benchmark also reflects money market rate differences between the US and the countries behind the foreign currencies, not just spot moves.sec.gov
• Trading since December 2013 and built as a registered 1940 Act fund, with currency weights actively set rather than locked to the index.sec.gov

Worth knowing

• FXC Thinly traded, so what you pay to get in and out can matter more than the 0.40% fee.
• The depository sets the interest rate and can move it to zero or below zero, which would shrink or halt what flows through to shareholders.sec.gov
• One currency, no cushion: the whole ride is the Canadian dollar against the US dollar, and the money sits in deposit accounts at a single bank.sec.gov

• USDU At 0.51% with no fee waiver, it sits above the currency-fund median and above single-currency trusts like FXE and FXY at 0.40% (also unwaived).
• Active means no index to hold it to: weights are the manager's call, so results can diverge from the Bloomberg Dollar Total Return Index in either direction.sec.gov
• Moderately traded rather than a volume monster, so spreads and order type matter more here, and income goes out annually or semiannually, not monthly.

Full FXC profile⁠

Full USDU profile⁠