You can click on the image if it is not clear.At this point I believe I am most favorably inclined to Sweden (FXS). It has a current account surplus, GDP growth has been getting better, the Riksbank has recently started a tightening cycle and Sweden is not overly dependent on the US the way that Canada and Mexico are.
The Swiss franc (FXF) has some of the same appeal but I perceive Sweden's economy to be more vibrant. I am very fond of Australia but they have a big current account deficit. I think the British pound holds some appeal but their MPC does not seem like it will raise rates, certainly not with the same visibility as Sweden.
If the product line proves successful, my hunch would be that they roll out trusts for the Yen and the Singapore dollar.
9 comments:
Roger - Have you considered shorting the dollar? Considering how much debt the US government has, I can't imagine our economy to sustain the current pace for too long.
-- Faisal Laljee
i own an OEF for clients that owns foreign currencies and I have said many times I expect to use the currency ETFs as well.
I suppose i am not truly shorting the dollar but I am holding other currencies as part of the cah allocation.
I know you mentioned Sweden and Australia as economies that interest you. Are you holding the Singapore dollar or currencies from Latin America?
to the extent they are in the OEF i use.
Curious, could you list the probable yields on these currency ETF's? (I assume that they work as proxy money market funds for their respective currencies)
They might be useful as an adjunct or alternative to investing in closed-end non-dollar denominated bond funds.
the yields are the same as the overnight rates of the respective countries. Swiss and Sweden are in the 2's, GBP and Canada should be in the 4s, Australia in the 5s and I am not sure about Mexico but I think the 4s as well.
Thinking Sweden? Think again:
http://www.freerepublic.com/focus/f-news/1649882/posts
http://www.townhall.com/blogs/c-log/Dan%20Mitchell/story/2006/06/16/201552.html
http://commentisfree.guardian.co.uk/david_boaz/2006/06/stumbling_in_sweden.html
Roger,
Can you buy options on the currency ETFs. Just curious.
Also can you share a complete list of all of the Currency ETFs
Thanks
Arun
If you click on the image you will get the first seven, since then the yen came out with ticker FXY.
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