Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Funky new ETF: good idea?
Old 10-05-2006, 10:59 AM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
Funky new ETF: good idea?

There is a recently launched ETF, the Powershares Currency Harvest Fund (DBV), that look interesting. Details here: http://www.dbfunds.db.com/dbv/index.aspx

They claim that the strategy would have produced attractive returns with relatively little volatility over the past 10 years. It supposedly works by going long futures of the three highest yielding currencies and short the three lowest yielding currencies within a universe of 10 liquid, developed country currencies. Mechanically, it is done via currency futures collateralized with T bills, rebalanced quarterly.

I haven't had a chance to to all the reading yet, but it looks interesting. I have a number of concerns that will need to be satisfied before I even consider investing in this thing, but I would be interested in other opinions.
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Funky new ETF: good idea?
Old 10-05-2006, 11:31 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Apr 2006
Posts: 1,490
Re: Funky new ETF: good idea?

initial reaction: if the strategy is as simple as you state, and if its profitable, will not others quickly adopt the strategy and wring-out the profits?
d is offline   Reply With Quote
Re: Funky new ETF: good idea?
Old 10-05-2006, 11:40 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
Re: Funky new ETF: good idea?

Quote:
Originally Posted by d
initial reaction: if the strategy is as simple as you state, and if its profitable, will not others quickly adopt the strategy and wring-out the profits?
Dunno. I have downloaded a few papers to read, so we will see what they say. The currency markets are very large and are not dominated by people motivated to transact in ways that stamp out arbitrage opportunities.
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Re: Funky new ETF: good idea?
Old 10-05-2006, 01:02 PM   #4
Thinks s/he gets paid by the post
saluki9's Avatar
 
Join Date: Feb 2005
Posts: 2,032
Re: Funky new ETF: good idea?

Yeah, the currency market does work a little differently than other market. Some here know I'm not a huge fan of active management, but currency is where I let that slide.

We do some work with some currency overlay managers on the fixed income side and they are able to do some pretty amazing things. I'm going to have to take a look at this ETF

saluki9 is offline   Reply With Quote
Re: Funky new ETF: good idea?
Old 10-05-2006, 01:17 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,483
Re: Funky new ETF: good idea?

When I worked at Chase, JPMorgan did structured notes they originated internally that worked somewhat on this principle.............

__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Re: Funky new ETF: good idea?
Old 10-05-2006, 03:56 PM   #6
Full time employment: Posting here.
 
Join Date: Oct 2002
Posts: 717
Re: Funky new ETF: good idea?

This looks interesting to me as well. Can someone here explain to me why they would have posted negative returns for the last year? (unwinding of the japanese carry trade scheme?)
__________________
Random Reinforcement is Highly Addictive.
riskadverse is offline   Reply With Quote
Re: Funky new ETF: good idea?
Old 10-05-2006, 07:11 PM   #7
Full time employment: Posting here.
 
Join Date: Mar 2005
Posts: 699
Re: Funky new ETF: good idea?

This ETF was discussed at raddr's board a few months back:
http://www.raddr-pages.com/forums/vi...509&highlight=

Conclusion (at least in my mind) seemed to be that this strategy should in principle be a loser, but happened to be profitable while the BOJ was playing their quantitative easing game. Now that that game is coming to an end, this strategy might be expected to stop working.
bpp is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Good Regional Food yakers Other topics 28 04-18-2007 05:03 PM
Cellphones... Anybody identify a good pre-paid plan??? chinaco FIRE and Money 16 04-02-2007 01:56 PM
Is Hard Work/Play Good for You? TromboneAl Health and Early Retirement 28 01-22-2007 02:33 PM
Good Website for ETF Expense Data? haha FIRE and Money 2 02-01-2005 11:59 AM
Good digital camera? cute fuzzy bunny Other topics 32 07-06-2004 04:35 AM

» Quick Links

 
All times are GMT -6. The time now is 01:06 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.