My Account | How to Invest  
This page is hosted on the fund section of Merk Funds
Overview  |   Performance  |   Strategy  |   Prospectus  |   Reports  |   Fund FAQ   |   How to Invest
Home > Funds > Merk Hard Currency Fund> Strategy

Merk Hard Currency Fund ® (MERKX)
Merk Hard Currency Fund


Under normal market conditions, the Fund invests at least 80% of the value of its net assets (plus borrowings for investment purposes) in “hard currency” denominated investments. Hard currencies are currencies of countries pursuing what Merk Investments LLC (the “Adviser”) believes to be “sound” monetary policy and gold. Sound monetary policy is defined by the Adviser as providing an environment fostering long-term price stability. Due to the intrinsic value of gold, the Adviser considers gold to qualify as a hard currency. The Fund normally invests in a managed basket of hard currency denominated, high quality, short-term debt instruments, including sovereign debt and gold. To the extent that the Fund invests in gold, it will normally do so indirectly through U.S. listed exchange-traded products (“ETPs”) that invest in gold bullion and futures contracts, including ETPs sponsored by the Adviser or its affiliates.

The Adviser will determine currency allocations based on its analysis of monetary policies pursued by central banks and economic environments. The Adviser may adapt the currency allocations as its analysis of monetary policies and economic environments evolves.

The Fund will specifically seek exposure to currencies of countries pursuing what the Adviser believes to be sound monetary policies. As long-term price stability is unlikely to be achieved by most currencies, if any, however, the Adviser may focus on countries with monetary policies that, in the Adviser’s view, better foster such stability. The Fund may from time to time focus its investment in just a few currencies.

To mitigate interest rate and credit risk, the Fund’s fixed income holdings typically have a weighted average portfolio maturity of less than eighteen months. In addition, the Fund only buys money market or other short-term debt instruments that are rated in the top three rating categories by one or more U.S. nationally recognized services or that the Adviser considers to be comparable in quality to such instruments. When selecting debt securities for the portfolio, the Adviser may sacrifice yield for high credit quality.

Fund Documents

pdf Fact Sheet, Attribution

pdf Prospectus / SAI

pdf Reports