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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Killswitch who wrote (95776)	7/22/2008 12:16:27 AM
From: Cactus Jack	Respond to of 110194

Besides the volume differences, it also is not an ETN like CNY is, so the bank debt risk issue is lessened or eliminated. That was my conclusion as well, but wasn't sure whether I was missing something. This scares me about CNY (the last two paragraphs): biz.yahoo.com "In March, Van Eck Global launched exchange traded notes, or ETNs, that track the swings of the Chinese and Indian currencies vs. the dollar. The Market Vectors Chinese Renminbi/USD ETN (NYSEArca:CNY - News) and Market Vectors Indian Rupee/USD ETN (NYSEArca:INR - News) gain value when the currency rises against the U.S. dollar. The ETNs actually track indexes created by Standard & Poor's. They hold three-month forward futures contracts. The contracts are held until expiration, sold, then rolled over into new contracts. The S&P Chinese Renminbi Total Return Index would have returned 8.68% in the past year and 2.91% as of March 31, according to the Market Vectors. But as with all exchange traded products, index returns vary greatly from real returns because of tracking error. As of Friday, the Chinese Renminbi/USD ETN traded at 39.45, or 1% below its inception price of 40 a share. The ETNs charge an annual fee of 0.55%. They're unsecured IOUs issued by Morgan Stanley, which means investors have to take on the company's credit risk. Unlike most currency ETFs, they pay interest based on the U.S. federal funds rate." jpg