I have been writing for months in my belief in Sweden as an investment destination. Most clients own one Swedish stock and the Swedish krona ETF (FXS), I have disclosed this before.I bought in to FXS in early July in the 138's. My general expectation for FXS was that it would not do much most of the time but that every once in a while it would help reduce volatility in the portfolio. That has been the case for the last few days and the chart posted here shows a narrow range for most of the time followed by a small but noticeable breakout.
For all I know FXS will go back into that channel but during the down draft so far the fund has acted as hoped for-it has reduced volatility of the portfolio. There have been some negative comments left by readers along the way on these but I think there is value in allocating a small portion to these types of products; be it ETFs, OEFs, actual currency or anything else that offers the effect.
I have been consistent on these will continue to be so but I would not be surprised to see better mousetraps come along.
5 comments:
Timely post Roger on your process. The whole IS greater than the sum of its parts.
As for us who restructure, for better or for worse, more often than yourself, I have been reading a book mentioned here. The author is Gerald Appel's son on etf investing. A good read, not too simple and not too complicated. Top down approach. He offers TA on how to know when there is a style trend change...obvioulsy the mkt is not yet from value to growth, then one can drill down into sectors usually associated with that style. From the macro point of view, implied is that a weak dollar will help technology, a growth sector. Overseas investors will capitalize on the strength of their currency to purchase technology, and the market may anticipate this. The fly in the ointment is higher commodity prices which will cut into their spending on new technology, not to mention global slowdown. For those that have allocated for furture buying power, laggards in tech may be something to overweight in the future. I like igw/semis and ign/networking(old names that may rise from the ashes.)It's a plan, anyway.(ps Appel has hard research into using style, domestic vs intl, and interest rate indicators to lower drawdown and increase longterm return.)
Roger.....any particular reason for selecting the Krona versus the Euro?
Won't they move about the same?
.....davpac
rates going up, stronger GDP growth than the Eurozone, lower unemployment that the Eurozone, visibility for a more conservative party to win election (this actually happened), a small natural resource element with timber, not a lot of reliance on the US consumer led me to think the krona would out do the Euro which has been right but not by a lot.
please comment on using the etf ewd-swedish fund instead of fxs.
i wrote two article about EWD for TSCM. If you go to Yahoo Finance you will see a link to both. One ios dated Jan 3 and the other is June 30.
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