Currency fund’s staying power product of simple investing strategy

Currency fund’s staying power product of simple investing strategy
News from InvestmentNews:

When Axel Merk decided to convert his investment advisory business into a mutual fund company in 2005, his friends told him he was nuts.

“There are thousands of products out there, and they said if I didn’t grow assets fast enough, the fixed costs would quickly put me out of business,” said Mr. Merk, who launched his flagship Hard Currency Fund that year with just $ 1 million in assets and a couple of dozen clients from his former advisory business.

He’s still around.

Mr. Merk’s flagship fund has grown to $ 550 million in assets and has about 40,000 beneficial owners.

Performance hasn’t been his central marketing point but rather the fact that currencies, on which the firm focuses, have low correlations with stocks and bonds.

“We’re not trying to get a 20% return,” Mr. Merk said. “We offer investors uncorrelated alternative assets, and we think it’s unnecessary to take excessive risk.”

Mr. Merk also credits the fund’s simple investing strategy — using no leverage and rarely taking short positions — for its ability to attract investors. The fund holds a range of short-term-debt securities, with an average duration of less than six months.

“We’re really at the cash end of things,” he said.

Mr. Merk minimizes credit and interest rate risk to keep moves in currency exchange rates the driving fa…………… continues on InvestmentNews

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Small Cap Value ETF Investing 101
News from ETF News And Commentary – NASDAQ:

Value Investing is an investment strategy that involves the selection of stocks that trade below their intrinsic value. Value Investors seek for shares of companies that do not represent their true intrinsic value or have been undervalued by the market. ( Try Value Investing With These Large Cap ETFs )

Value investors are of the view that the market often reacts in an exaggerated way to both positive and negative news of certain stocks. This leads to movement in stock prices that do not reflect the company’s long-term fundamentals. The strategy is to invest in the stock when it appears to be somewhat inexpensive so as to take advantage of the correction when the stock finally reflects its true market price.

Companies with small market capitalization are looked upon as those which offer opportunity to exploit market inefficiency. So, a combination of the two, the small cap stocks and value stocks, together can form the best performing market segment. In order to play in the market with these two kinds of stocks at the same time, small-cap value fund is the best available option to an investor. Value small cap funds tend to exhibit higher risk adjusted returns than large and growth stocks. (

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