Performance

Now let’s turn to longer-term performance. As noted, professional currency traders have not turned their sophistication into profits in recent years. Two index-oriented mutual-fund pairs, one from ProFunds and one from Rydex, have. Both fund families offer DXY-long and DXYshort funds to meet the needs of active traders. If we combine the long and short funds from each fund group, we replicate closely the long/short performance of active fund managers.

Moreover, the gains from the winning DXY orientation exceed the losses from the losing DXY orientation on a systematic basis. Therefore, the combined results are both positive and better than those of the currency managers who actively trade unique currency pairs. The average of the DXY benchmarked funds outperformed the average performance of the currency indexes by 6.2 percent.

The two extreme performance comparisons of DXY funds to individual currency index returns are:

•ProFunds (net) DXY funds outperformed the CISDM asset weighted currency index by 9.15 percent for the first 7 months of 2006.

•ProFunds (net) DXY funds outperformed the CISDM equal weighted currency index by 4.19 percent.