Jen Ryan of TheStreet.com reports that currency funds can offer investors the opportunity to put their money in international markets while minimizing the risk that comes with investing in individual stocks and bonds.

There are a different kinds of currency funds. Some of these include:

• Open-Ended Mutual Funds
  Open-ended mutual funds have no restrictions on the number of shares that the fund issues to investors. The fund will issue shares to investors who want to invest in fund so long as there is a demand for those shares. Open ended mutual funds also buy back shares from investors who want to sell.

• Exchange Traded Funds (ETFs) that track currencies
  A currency exchange traded fund (etf) is a security that tracks currencies but trades like a stock on an exchange in which it is listed. Just like stocks Exchange traded funds rise and fall in value as they are bough and sold throughout the day.

A few Exchange Traded Currency Funds that you can investigate for your portfolio are as follows:

• PowerShares Deutsche Bank U.S. Bank U.S. Dollar Index Fund (UUP)
  This fund will be issued by PowerShares a unit of Amvescap (AVZ) and will list on the American Stock Exchange.
  This fund will track the value of the U.S. dollar in relation to a basket of six currencies namely the euro, yen, British pound, Canadian dollar, Swedish krona.
  The cost for investing in this fund will be 0.55% or 55 cents for every 100 dollars invested.

• PowerShares Deutsche Bank U.s. Dollar Index Bearish Fund (UDN)
  This fund will be issued by PowerShares a unit of Amvescap (AVZ) and will list on the American Stock Exchange.
  This fund will tbe negatively correlated to the value of the U.S. dollar in relation to a basket of six currencies namely the euro, yen, British pound, Canadian dollar, Swedish krona.

• DB G10 Currency Harvest Fund (DBV)
  This fund is offered by PowerShares.
  It tracks a basket of nine currencies. These are the euro, yen, Swiss franc, British pound, Norwegian krone, Swedish krona, Canadian dollar, Australian dollar, New Zealand dollar.
  This index of currency futures contracts is designed to take advantage of the trend that shows that currencies associated with relatively high interest rates on average, tend to rise in value relative to currencies associated with low interest rates.

• CurrencyShares Euro Trust (FXE)
  This fund is offered by Rydex.
  CurrencyShares Euro Trust tracks the price of the euro net of Trust expenses. It is expected that these expenses will be paid from interest earned on the deposited euros.

• Other similar funds offered by Rydex that track single currencies include:
  CurrencyShares British Pound Sterling Trust (FXB)
  CurrencyShares Canadian Dollar Trust (FXC)
  CurrencyShares Australian Dollar Trust (FXA)
  CurrencyShares Swiss Franc Trust (FXF)
  CurrencyShares Swedish Krona Trust (FXS)
  CurrencySharesSM Mexican Peso Trust (FXM)

A few Open-Ended Currency funds you can investigate are as follows:

• Franklin Templeton Hard Currency (ICHHX)
  Merk Hard Currency Fund (MERKX)
  Rydex Dynamic Strengthening Dollar (RYSBX)
  ProFunds Rising U.S. Dollar (RDPIX)
  Rydex Dynamic Weakening Dollar Fund (RYWBX)
  ProFunds Falling U.S. Dollar (FDPIX)

Sources:
TheStreet.com
PowerShares.com
Rydex Investments