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Investors have been directing cash to new exchange traded funds that invest in commodities and emerging markets bonds to hedge against a weaker U.S. dollar, according to a report.

These ETFs can offer investors a safe haven from a depreciating greenback. Investors are worried economic weakness could trigger more fiscal stimulus from the Federal Reserve and further debase the dollar.

The most popular ETFs invest in emerging market bonds, commodities and rare earths, a new niche sector, reports Austen Sherman for MarketWatch. The $900 million WisdomTree Emerging Markets Local Debt Fund (NYSEARCA:ELD) ranked No. 3 out of 300 ETFs launched over the past year.

Likewise, No. 4 was the WisdomTree Asia Local Debt Fund (NYSEARCA:ALD) with $478 million in assets, according to the report.

“When you have an environment where people are worried about growth at home, and see good stories in emerging markets, they are going to try and get access to them,”said Martin Kremenstein, CIO of Deutsche Bank’s db-X platform, in the report.

The non-dollar focused bond funds are gaining traction as the U.S. dollar weakens against the currencies of emerging market countries. Meanwhile, central banks overseas have risen rates in countries where growth has momentum, compared to the U.S. where benchmark yields are hovering around zero.

Investors are also flocking to commodities-focused ETFs. For example, the Market Vectors Rare Earth and Strategic Metals (NYSEARCA:REMX) has about $465 million in assets since its October 2010 launch. However, narrow sector funds can be much more volatile.

“The two biggest concerns are where is the West going to get the rare earth metals and of those companies in the West and Australia, which ones will actually get to production,” says Malcom Gisson, co-manager at Encompass Funds.

Tisha Guerrero contributed to this article.

Source: Investors Betting Against the Dollar With New ETFs: Analysis