A diverse portfolio reduces investment risks. But my savings may still be dominated in a single currency. One portfolio that diversifies currency holdings are special drawing rights: U.S. dollar 41.73%, Euro 30.93%, Renminbi (Chinese yuan) 10.92%, Japanese yen 8.33%, British pound 8.09%. It seems to me that holding such seems like the currency equivalent of an index fund, diversifying currency exchange rate risks. Is it possible for an individual to hold such special drawing rights or something equivalent?
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To my understanding, Special drawing rights are assets defined and maintained exclusively by the International Monetary Fund and exclusively to be used between IMF and member-countries and are not available to retail clients per se.
That being said, there's nothing that prohibits you from actually making such a currency portfolio for your savings should you want to do so on your own.
If you don't want to be bothered with re-balancing etc and can take the fees involved, you can always go for something like this to gain exposure to an SDR-like product.
Leon
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The link is broken. Motif Investing shut down in May 2020. – Flux Sep 22 '20 at 08:03
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Apparently you can own SDR's by buying cryptocurrency stablecoin TerraSDR(SDT) on the Bitrue exchange. The stablecoin is backed by actual SDR's.
Different from other stablecoins due to it being stabilized by an algorithm which burns or mints units accordingly to match the current value of the SDR. The stablecoin pairs with Terra(Luna) which generally increases in value as coins are burned.
Terra SDT could be compared to similar crypto such as Pax Gold, which is backed by actual gold.
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How can it be backed by "actual SDRs" given the point in the other answer that are exclusively to be used between the IMF and member countries? – GS - Apologise to Monica Jan 05 '22 at 09:14