Why would one use Currency ETCs rather than forwards?
Forwards may involve uncollateralised counterparty risk, whereas Currency ETCs are collateralised. Currency ETCs, which trade and settle like equities, provide operational simplicity. In contrast, forwards require administrative and legal work (negotiation of contracts) and operational resources (rolling and managing positions, monitoring risks), which may prove cumbersome and costly. Furthermore, certain client mandates may only permit the use of forwards for hedging purposes.
