Rakesh Saxena

Currency-Basket ETF: A Portfolio Imperative

Johnni: This fund is a good US$ hedge, the alternative being a euro-specific ETF. Many thanks - R


On Oct 20 02:33 AM Johnni wrote:

> I was considering using this ETF or UDN as a US$ hedge. Any input
> on alternatives?

Currency-Basket ETF: A Portfolio Imperative

Alan: If you are optimistic about a broad economic recovery (global), you should stay long. My view is that banks and corporations in the major emerging markets (many of which are included in this fund) face the daunting task of refinancing foreign currency debt. Of course, as you will see from my earlier posts on this site, I am also generally bearish for 2010. Many thanks - R


On Oct 20 01:01 AM Alan Young wrote:

> I'm long this fund, so I appreciate your explanation of its benefits.
> And, I would really like to understand why shorting would be a better
> idea, as you claim. With 11 different currencies in the basket, each
> one is just 9% of the fund. How many of these countries (including
> Brazil, China, Israel and Singapore) have to have a debt crisis to
> offset the trend of strengthening currencies against the dollar,
> plus pay for the cost of margin borrowing?

Currency-Basket ETF: A Portfolio Imperative

Good point. Certainly don't want to move the price when one enters arbitrage trades. Many thanks - R


On Oct 19 10:58 PM No Free Cake wrote:

> Interesting stuff as always.
>
> For something like this would have been nice if you'd mentioned it
> isn't very liquid. Over the past couple of days this ETF has had
> periods of 20 minutes where no shares trade hands. Even fairly small
> orders move the price. Certainly don't use "market" orders with this
> one.