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I am also short one of the ADRs - SKM. I thought about shorting all 3, but kEPs premium was much lower, and the volatility of a deep cyclical steel company - PKX scared me to short it. That's not to say that I won't - just that at the time I initiated my short, SKM seemed the best bet. I have no rational explanation for the persistence of these "premiums", to the extent they exist. It concerns me too, but I am just going to trust my judgment, and I believe this will work out. One question, why use FAK to hedge your short position, and not just use only MAKOX? While FAKs premium is the smallest of the 4 CEFs, it still is a premium. And while I'm not sure this is correct, I read somewhere that FAK has the smallest percentage of its holdings in lower priced "local" shares in Korea, making it the CEF that least deserves a premium. |
