Think-About-It

Is the China Growth Story Coming Unglued?

Cabaretv,

Thanks for your post and link to the article plus your mentioning FXP which I was not aware of. The stated objective of FXP is

"The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 index."

This would be a great hedge for me except that when I plot it's chart against FXI's chart it looks like FXP is not working like it should. It should be perfoming inversely at a ratio of 2:1. However, over the past year their this has not occured and even worse, there have been times when they been highly correlated. For example, from November 2007 (inception for FXP) to May 2008 both were down between 10% - 20% and from Nov-07 through today FXI is down 30% but FXP is only up about 10%. That's not 2x inverse.

Do you know what's going on here?

--Sorry, I tried to cut/paste the charts from Yahoo to no avail