southbeach

Why Argentina's Talking Again

not really a relevant comment to the article, but a nice way to market your views and services.


On Sep 21 11:31 PM Mad Hedge Fund Trader wrote:

> itx A number of readers have asked me to come up with a safe, high
> yielding investment in which to hide out in case the equity markets
> swoon again. That means they are looking for a security that offers
> a high fixed return, denominated in a strong currency that will benefit
> from future upgrades that will boost the principal over time. All
> of that is another name for the Invesco PowerShares Emerging Market
> Sovereign Debt ETF (seekingalpha.com/symbo...). The fund
> has 40% of its assets in bonds issued in Latin America and 31% in
> Asia, with the bulk of the maturities exceeding ten years. The two
> year old fund now boasts $ 340</span> million in market cap and pays
> a handy 6.42% dividend. This beats the daylights out of the nine
> basis points you currently earn for cash, the 3.40% yield on 10 year
> Treasuries, and still exceeds the 6.42% dividend on the iShares Investment
> Grade Bond ETN (seekingalpha.com/symbo...), which buys predominantly
> single “A” US corporates. The big difference here is that foreign
> bonds are issued in strong foreign currencies instead of weak dollars,
> and have a rosy future of further credit upgrades to look forward
> to. It turns out that many emerging markets have little or no debt
> because until recently, investors thought their credit quality was
> too poor. No doubt a history of defaults in Brazil and Argentina
> in the seventies and eighties is at the back of their minds. With
> US government bond issuance going through the roof, the shoe is now
> on the other foot. A price appreciation of 125% over the past year
> tells you this is not exactly an undiscovered concept. Still, it
> is something to keep on your “buy on dips” list.