In the News: WSJ

The WSJ features the Merk Funds as potential portfolio diversifiers

" '...currencies are becoming volatile and that creates some trading opportunities, Mr. Young said. He is counting on the expertise of fund managers like Axel Merk, manager of the Merk Hard Currency Fund (MHCIX), ...

...the Merk Absolute Return Currency Fund (MABFX) has [..] benefited from a position that favored New Zealand's dollar over that of Australia, as New Zealand rebuilt following an earthquake and Australia lagged because of a reliance on commodities and on China's now-slowing economy, Mr. Merk said. It also profited earlier this year from an extremely short position on the yen and by shorting the Swiss franc versus the euro, he said.

"The next wave of problems could be related to rising interest rates and currency funds could be more resilient," said Mr. Wade [president of Wade Financial Advisory], who has been investing in currency mutual funds for about six years. He also expects the funds to offer protection against inflation.

Among the funds he uses are Merk Hard Currency Fund; Merk Asian Currency Fund(MASIX), which invests in a basket of Asian currencies; ...

His clients with a moderate-risk profile may have about 5% of their portfolio in currency investments, Mr. Wade said.

 

 

 

Since the Funds primarily invest in foreign currencies, changes in currency exchange rates affect the value of what the Funds own and the price of the Funds’ shares. Investing in foreign instruments bears a greater risk than investing in domestic instruments for reasons such as volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, emerging market risk, and relatively illiquid markets. The Funds are subject to interest rate risk, which is the risk that debt securities in the Funds’ portfolio will decline in value because of increases in market interest rates. The Funds may also invest in derivative securities, such as forward contracts, which can be volatile and involve various types and degrees of risk. If the U.S. dollar fluctuates in value against currencies the Funds are exposed to, your investment may also fluctuate in value. The Merk Currency Enhanced U.S. Equity Fund may invest in exchange traded funds (“ETFs”). Like stocks, ETFs are subject to fluctuations in market value, may trade at prices above or below net asset value and are subject to direct, as well as indirect fees and expenses. As a non-diversified fund, the Merk Hard Currency Fund will be subject to more investment risk and potential for volatility than a diversified fund because its portfolio may, at times, focus on a limited number of issuers.