ELD: International Bond ETF Guide: All the Options For Ex-U.S. Fixed Income Exposure http://investment-objective.info/investments/ELD
That is part of globalization. You throw a stone in a pond it ripples all over. So no more protection against global turmoil. If Europe catches cold it spreads through out the universe. Only way one can protect is put the rules that bank can not lend outside the country and for lending to the country put Global banks in charge that can isolate this kind of panic selling.
There are no holdings in Euro countries, so why the drop to new lows?
And the holdings in BRIC countries are low, probably about 5%.
Constituent countries: Brazil, Chile, Colombia, Mexico, Peru, Poland, Turkey, South Africa, Russia, Malaysia, Indonesia, Philippines, Thailand, and South Korea.
I have become concerned with what is held in my IRA since learning that purchasing certain assets can cause an IRA to become taxable.
I own GTU which is a Canadian gold trust with shares trading on the AMEX. I'm not sure that it's a legal IRA asset since i am invested
in metals that are not US coin, such as gold eagles. If you have any info on this I sure would appreciate your thoughts.
ETFs trade like stocks. You should have not problem holding it in an IRA regardless of what's held in the portfolio. As an example, look at Direxion funds which are 3x the direction of the market (bull and bear.) You can hold those ETFs also in an IRA.
shouldn't a higher divy from rate increases an the devalutation of the dollar counter balance the dipping of price of the existing bonds?
Amazing how this thing, like many stocks, languish for weeks or even months, then all of a sudden they pop upward. I sold a little into this run-up (paid $50.60 a while back plus I got the January divvy) so I'm happy.
Holding some more and wondering if this is a one-day pop or the start of something bigger. Hard to see too much upside as the battle continues between a weaker US dollar and the need to raise rates in emerging markets (which hurts existing bond holdings). Also there is some flight from emerging markets.
The new ETF doesn't really interest me. One of the holdings is US TIPS - and guess who sets the 'core inflation rate'? So if you own US TIPS you will lose in dollar appreciation, and by the fact that the US will keep saying that there is no inflation.
Owning bonds from commodity exporting countries sounds nice, in that those currencies should appreciate - but since inflation will be lower in those countries their bonds will be paying lower interest rates.
The more intriguing thing in the article is the four other regional bond funds that they may come out with. We will have to see what is in those.
Ultimately, what I am looking for is some protection against the inevitable decline in the value of the US dollar, without being trapped at the top of a commodity bubble.
even if it's an ETF a small discount to NAV when emerging markets are getting hammered by rising political and inflation risks in certain areas of the world is natural. I think the next couple of months will provide an attractive entry point under 50
NAV drops 2 cents yesterday, but stock price down 40 cents. Either someone is dumping or we are being shorted. Can't see any great change in actual currency exchange rates, or in bond prices, so NAV should repeat the same pattern today. Good buying opportunity to pick up some ELD at a discount to NAV.
Agree - I wouldn't directly short the dollar (it may turn out to be a safe haven in case of dramatic world events). EMLC is fine for longer term. I did lighten last week on a UDN divergence, and added it back today. UDN is green (a weaker dollar) and ELD is red (inflation fears? emerging market troubles?). We'll see what happens - but I would expect (hope?) for ELD to turn green on Wednesday. We should also be within a week of going ex-div on the January distribution, so I don't mind being overweight ELD.
Interesting,profitable? observation. I'm going to watch that. The $ seems doomed, but I'm not willing to put money on it by shorting directly. Alternatives seem relatively 'safer'. And often better interest.
I was doing some chart comparisons with UDN, CEW, EMB, and EMLC - over the last six months, one month, and one week - looking for any patterns. They all move in relative sync with each other - with some relative variation due to different schedules and amounts of divvies.
The only potential trading pattern I noticed happened in the last week, where UDN (dollar bear) was down big on Friday, and ELD held up. Then on Monday, ELD too the hit. I'd have to do some more research and watching, but (depending on the type of account you have) it may be worth selling ELD on any day when it has strength while UDN is down quite a bit.
I am pretty overweight on ELD right now, so I may lighten up if I see that pattern. Unless the market crumbles and gives me better buying opportunities elsewhere, I don't see anything I would rather own than ELD right now.
I am way overweight ELD because I do not believe that the US Dollar will be quite as strong as the talking heads are saying. Perhaps against the Yen or Euro, but not against the emerging market currencies. I'm very happy with holding bonds from emerging market countries that are growing and have less debt.
This is really a buying opportunity because of the fear of inflation in emerging markets - which may hurt bonds. The main inflation is in the United States due to devaluing its currency against the emerging market currencies. The emerging market currencies have done a better job of holding value against commodities.
And finally, if the world recovers, the emerging markets will still outperform the developed world - meaning stronger currencies. And if the global economy slows (as I suspect it will) - then the current bonds ELD is holding will appreciate in value.