The CurrencyShares products are intended to offer investors a new and different opportunity to participate in the foreign currency market through an investment in securities. Historically, the logistics and expense of investing in foreign exchange have been a barrier to entry for many investors. The CurrencyShares products are aimed at overcoming the barriers to entry. A prospective purchaser of CurrencyShares should not encounter any tasks or costs beyond those associated with purchasing another publicly-traded equity security. CurrencyShares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining potential investment benefits similar to those of holding foreign currency.

An investment in CurrencyShares may help to balance a portfolio or help protect against currency swings, thereby reducing overall risk potential. All forms of investment, however, carry some degree of risk. Investing in CurrencyShares carries the same risks as investing directly in foreign currency.

Investors may wish to invest in foreign currency in order to take advantage of short-term tactical or long-term strategic opportunities. From a tactical perspective, an investor that believes that the U.S. dollar is weakening relative to a particular foreign currency may choose to buy shares of that particular CurrencyShares trust in order to capitalize on the potential movement. An investor that believes that a particular foreign currency is overvalued relative to the U.S. dollar may choose to sell shares of that particular CurrencyShares trust.

From a strategic standpoint, since currency movements can affect returns on cross-border investments and businesses, both individual investors and businesses may choose to hedge their currency risk through the purchase or sale of foreign currency. For example, in the case where a U.S. investor has a portfolio consisting of European equity and fixed income securities, the investor may decide to hedge the currency exposure that exists within the European portfolio by selling an appropriate amount of shares of the CurrencyShares Euro trust. Such sales may include short sales in accordance with applicable Securities and Exchange Commission (SEC) regulations. In doing this, the U.S. investor may be able to mitigate the impact that changes in exchange rates have on the returns associated with the European equity and fixed income components of the portfolio.

Similarly, a business that has currency exposure because it manufactures or sells its products abroad is exposed to exchange rate risk. Buying or selling shares of one or more CurrencyShares trusts in appropriate amounts may reduce the business's exchange rate risk.

More generally, investors that wish to diversify their investment portfolios with a wider range of non-correlative investments may desire to invest in foreign currencies. Non-correlative asset classes, such as foreign currencies, are often used to enhance investment portfolios by making them more consistent and less volatile. Less volatility means lower risk and closer proximity to an expected return.

Risks to consider

The value of the shares of each CurrencyShares trust is tied to the value of a specific currency that is held by the trust. Fluctuations in the price of the currency could materially and adversely affect the value of the applicable trust's shares. Several factors may affect the price of foreign currency relative to the U.S. dollar including:

National debt levels and trade deficits

Domestic and foreign inflation rates and investors' expectations concerning inflation rates

Domestic and foreign interest rates and investors' expectations concerning interest rates

Investment and trading activities of mutual funds, hedge funds and currency funds; and

Global or regional political, economic or financial events and situations

In addition, the currency in any CurrencyShares trust may not maintain its long-term value in terms of purchasing power in the future. When the price of the currency declines, the price of a share would likely decline as well.

Each prospectus contains more complete information about the specific CurrencyShares trust. Investors should carefully consider the investment objectives, risks, charges and expenses of each CurrencyShares trust before investing. The risks associated with each of the CurrencyShares trusts, as well as other considerations. For a more complete discussion of risk factors applicable to each CurrencyShares trust, carefully read the particular trust's prospectus.