Money
BULLISH
ON GOLD
composed of short USDX futures and bonds with far less
contracts designed to replicate the risk, Holtzman points out. ANOTHER WAY OF
performance of shorting the green-
playing the theme of
back against the euro, yen, pound, Stock Fund: VEA
a falling dollar is to
Canadian dollar, Swedish krona, and For developed-coun-
buy commodity ETFs,
particularly gold-related
Swiss franc. try large capitalization
ETFs. Sheldon notes.
“It really acts as a buyer of cash stocks, Kay recommends
“If as an investor you’re The fund returned 35.54
accounts,” Kay says. “You’re diver- Vanguard Europe Pacifi c bearish on the dollar, by percent in the fi rst eight
sifying your cash outside the U.S. ETF (Ticker: VEA). “It’s
defi nition you’re bullish months of the year.
dollar. It’s good for a short-term very inexpensive and has
on gold, because there’s
option, but it’s relatively expensive a good coverage of devel-
been a fairly strong inverse
Physical Gold
relationship between the
for a cash account, given that inter- oped markets,” he says.
Fund: GLD
dollar and gold over the
ests rate are so low, and it costs about The fund has a conser-
If you want a piece of a
last several years,” Michael
fund that invests directly in
50 basis points a year. All of the vative investment strat- Sheldon, chief investment
gold bullion itself, Sheldon
income consists of capital gains on egy, seeking to mimic the
strategist at RDM Financial
recommends SPDR Gold
the futures contracts, which means performance of the MSCI
Group in Westport, Conn.,
Shares (Ticker: GLD). The
it’s tax-advantaged.” EAFE index. That index
tells Newsmax.
fund returned 14.04 percent
For the fi rst eight months of the includes stocks in Europe,
this year through Aug. 31. “If
Gold Stock
year, the fund returned 8.94 percent, Asia, and Australia. VEA
you’re truly bullish on gold,
Fund: GDX GDX is probably a better
according to Morningstar. returned 27.01 percent in
One possibility is play,” Sheldon says. “That’s
If you’re willing to accept the the fi rst eight months of
Market Vectors Gold because as gold prices rise,
risk of investing in single cur- the year. Miners ETF (Ticker: GDX), many company have fi xed
rency funds, Holtzman suggests Small-cap stocks make
which is made up of gold- costs, so gold companies
funds that are oriented toward the a lot of sense for those
mining stocks. “You get will earn incrementally more
Brazilian real, the Canadian dollar, playing the weak-dollar
diversifi cation as opposed profi t” than the metal itself.
to a single gold stock,” — D.W.
and the Australian dollar. “All are trend, Kay says, because
heavy exporting countries for com- smaller companies gener-
modities,” he notes. ally are less involved with more volatile, and it includes emerg-
international trade. ing markets,” Kay says. “But you’re
Currency Funds: BZF, FXC, FXA getting better growth exposure . . .
The Brazilian real fund, called the Stock Fund: VSS and more currency diversity.” The
WisdomTree Dreyfus Brazilian Real For a small-cap fund, he cites fund has returned 43.29 percent
Fund (Ticker: BZF), returned 27.9 Vanguard FTSE All-World ex-US from its inception April 2 through
percent in the fi rst eight months of Small-Cap ETF (Ticker: VSS). This Aug. 31, according to Vanguard.
2009, according to Morningstar. fund also is passive, seeking to
The Canadian dollar fund is called match the FTSE Global Small Cap Bond Fund: WIP
the CurrencyShares Canadian Dollar ex-US Index. That includes small If you’re interested in bonds, Kay
Trust (ticker: FXC). This fund cap stocks around the world, out- suggests SPDR DB International
returned 13.36 percent through side the U.S. “There’s a higher Government Inflation-Protected
August. risk because these are smaller Bond ETF (Ticker: WIP). This is the
The Australian dollar fund companies, which are international equivalent of Treasury
is called the CurrencyShares Infl ation Protected Securities (TIPs).
Australian Dollar Trust (ticker: It’s made up of infl ation-protected
FXA). government bonds from developed
It returned 23.9 percent and emerging market countries
through August. These funds outside of the United States. “It’s
aren’t for the risk averse. “You well diversifi ed among interna-
have to be careful because of the tional currencies, while at the
volatility,” Holtzman says. “It’s same time providing infl ation
not like a stock.” protection,” Kay says. The fund
T
O
O
H
You can gain exposure to for- returned 17.32 percent in the
P
C
K
eign currencies through stocks fi rst eight months of the year.
T
O
I
S
88 NEWSMAX MAXLIFE / NOVEMBER 2009
86_MONEY_dollaretfs.indd 88 9/30/09 8:04 PM
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