odin

New Currency ETFs - Give Them Some Time

Its my impression that the currencies are held in NDF form (non-deliverable futures). i.e. you cant demand payment in the actual currency.

While I dont know about the structure underlying the NDF (how are these issuers hedging? are they buying CNYs?) What this means is that during periods of high demand (rush into CNYs), they will likely incoporate some of the expected appreciation and trade at a premium fx rate. When everyone is selling, I expect a big discount.

There are too many unanswered questions as to what one actually owns. What happens if convertibility is restrictred/suspended?