What is a forward currency contract?

Currencies Unplugged
Merk Mutual Funds sheds light on key concepts relating to the currency market.

Can any currency be converted into any other currency?

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A forward currency contract is similar to a spot currency contract except for one important distinction: it can be customized to settle (i.e. pay for and take delivery of the currency) at any specified time in the future. A purchaser of a currency may enter into a forward currency contract where they agree to pay a certain amount of U.S. dollars in exchange for an agreed amount of currency at any agreed upon future point in time. This allows a purchaser or seller of a currency to tailor the transaction to suit their specific needs.

Both the Merk Absolute Return and Merk Asian Currency Funds have historically gained currency exposure through the use of forward currency contracts; the net notional U.S. dollar value of these contracts is typically fully collateralized.

Kieran Osborne
Co-Portfolio Manager of the Merk Absolute Return Currency Fund

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Before investing you should carefully consider the Fund's investment objectives, risks, charges and expenses. This and other information is in the prospectus, a copy of which may be obtained by clicking here. Please read the prospectus carefully. Foreside Fund Service, LLC, distributor.