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DB 3x Inverse Japanese Govt Bd Futs ETN Message Board

  • bobby2loaves bobby2loaves Jan 19, 2013 7:46 AM Flag

    Why is this not reacting to the FX rate?

    The Yen has been sinking like a stone against the dollar for the past 2 months, yet this triple short JGB ETF is down over that timeframe, while JGB 10-yr interest rates are relatively flat?

    I thought this vehicle was supposed to capture the change in exchange rate of the yen vs. the dollar. So if the Yen is down 10%, shouldn't this ETF have risen 10% (or maybe 30%?) in the past 2 months, instead of sitting flat?

    It looks like the Japanese are going to do a lot of printing to get out of this mess, and destroy the Yen. If this ETF can't capture that kind of action, but only captures actual interest rates and/or defaults, it isn't as robust as I imagined.

    Thoughts?

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    • " he investment seeks to replicate, net of expenses, three times the performance of the DB USD Inverse JGB Futures Index. The index is intended to measure the performance of a notional short position in 10-year JGB Futures."
      You would of have to bought YCS to capture the movement of the yen. IMHO once they lose control of the yen then this will start moving.

      http://www.cnbc.com/id/100391704/Japanrsquos_Debt_Time_Bomb_Is_Ticking_Kyle_Bass

 
JGBD
14.838Sep 2 11:45 AMEDT