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PowerShares Chinese Yuan Dim Sum Bd ETF Message Board

  • hedgedgabry hedgedgabry Oct 6, 2011 6:29 AM Flag

    trick or treat?

    anyone interested in this ETF?

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    • From: http://finance.yahoo.com/news/Van-Eck-Joins-Dim-Sum-Bond-indexuniverse-2197595718.html?x=0

      Reference: chlc, dsum, rmb

      But right now, Van Eck holds the price edge:CHLC is the cheapest of the three, with net annual fees pegged at 0.39 percent, while RMB costs 0.65 percent and DSUM 0.45 percent.

      CHLC should issue monthly dividend distributions and, when applicable, capital gains annually, Van Eck said. The fund’s benchmark consists of 45 bonds with average maturity of just under three years, the company said.

      Nearly 40 percent of the basket is allocated to corporate-issued bonds, and the portfolio has an average coupon of 2.1 percent. Roughly two-thirds of the basket is rated BBB or higher.

      The strategy caps each issuer's weight at 22.5 percent, Van Eck said, and the mix is rebalanced monthly.

      Van Eck also has an active China bond ETF currently in registration that will select bonds from the same universe, allowing investors the flexibility of playing the space either passively or actively.

      My thinking: We must look at the daily volume -- unless the volume picks up, this could be a problem.

    • DSUM seems to have a rate of return -- the exact rate is unclear to me -- about 3%?. It would seem that the Chinese will allow the exchange rate to change over time -- but future is unclear -- the rate of change is uncertain. How long would we need to hold DSUM if we bought some today? I notice that CHLC is an option -- but it is not clear if this is a better option. FXCH is an option -- but I assume it has no yield.

      I suspect that there an unknown risks involved with DSUM due to the Chinese legal system regarding bond holders but I an not clear about this.
      I suspect that DSUM would be a good investment -- but there might be other things that are much better.

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