Merk May Have an Answer to Bond Fears
Palo Alto, CA (PRWEB) October 08, 2013 -- The Merk Absolute Return Currency Fund (MABFX) has delivered positive absolute returns in both rising and falling dollar environments. "For investors increasingly concerned about their bond holdings, the Merk Absolute Return Currency Fund may be an attractive alternative," explains Axel Merk, President and Chief Investment Officer of Merk Investments, the manager of Merk Funds.
The Merk Absolute Return Currency Fund outperformed all of its 54 peers in the Bloomberg Currency category for the 1-year period through 09/30/2013.* It has provided investors with positive returns while keeping its risk profile relatively low.
Low correlation, low volatility: alternative to bond funds?
The Fund has taken advantage of the low correlations offered by the currency asset class versus traditional investments. In using a "long/short" approach to currency investing, the Fund’s risk profile has been tightly contained. Analyst Daniel Lucas of the Merk Portfolio Management Team expands: "We are proud of the Fund’s Sharpe ratio of 1.40 over the past year while containing its standard deviation of returns at 6.35%." Lucas continues, "In our opinion, the Fund’s low historical correlation with U.S. Bonds of -0.23 and with U.S. equities of 0.44 may make it a great portfolio diversifier.** We believe the Fund has lived up to its goal of delivering absolute returns regardless of prevailing market conditions. Such absolute return strategies may be particularly attractive to investors worried about the outlook for traditional asset classes such as stocks and bonds in an environment of increasing uncertainty."
The Merk Absolute Return Currency Fund seeks to generate positive returns by investing in currencies. Using a "long/short" pure play on currencies, the Fund aims to profit regardless of the direction of the U.S. dollar or traditional asset classes.
The Fund combines strategic and tactical currency management with dynamic risk management seeking low correlations and low volatility. Merk believes the success of the Merk Absolute Return strategy stems from the systematic projection of Merk’s macro views onto the non-directional space as well as active discretionary management, allowing Merk maximum flexibility within a consistent risk tolerance range.
Through 09/30/13, the Merk Absolute Return Currency Fund Institutional Shares had a 1-year return of 9.29%, an annualized 3-year return of -0.73%, and an annualized return of -0.47% since inception on 09/09/2009. The Merk Absolute Return Currency Fund Investor Shares had a 1-year return of 8.98%, an annualized 3-year return of - 0.97%, and an annualized return of -0.69% since inception on 09/09/2009. The Fund’s performance data represents past performance and is no guarantee of future results. Current performance may be lower or higher than the performance data quoted. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than original cost. Please visit http://www.merkfunds.com for most recent month end performance. The Fund’s expense ratio is 1.05% for the Institutional Shares and 1.30% for the Investor Shares.
Merk is a leader in the currency asset class and a pioneer in providing uncorrelated returns and portfolio diversification through transparent no-load currency funds. The Merk Funds may provide valuable diversification benefits. Merk White Papers and other primary research on the currency asset class can be found at http://www.merkfunds.com. The Merk Funds® include: the Merk Hard Currency Fund® (MERKX), the Merk Asian Currency Fund® (MEAFX), the Merk Absolute Return Currency Fund® (MABFX) and the Merk Currency Enhanced U.S. Equity Fund® (MUSFX).
For important information about the Merk Funds, including their holdings, how to obtain a prospectus and how to invest, please visit http://www.merkfunds.com.
For more information, or to schedule an interview, please contact:
Joe Paone
Merk Investments, LLC
(650) 323 4341
pr(at)merkinvestments(dot)com
This information does not constitute a solicitation or an offer to buy or sell any investment security, nor provide investment advice. Merk Investments LLC.
Transaction fees and other restrictions may apply to invest through a broker. As with any mutual fund product, there is no guarantee that the funds will achieve their goals.
Investors should consider the investment objectives, risks and charges and expenses of the Funds carefully before investing. This and other information is in the prospectus, a copy of which may be obtained by visiting the Funds’ website at http://www.merkfunds.com or calling 866-MERK FUND. Please read the prospectus carefully before you invest.
Since the Fund primarily invests in foreign currencies, changes in currency exchange rates will affect the value of what the Fund owns and the price of the Fund’s shares. Investing in foreign instruments bears a greater risk than investing in domestic instruments for reasons such as volatility of currency exchange rates and, in some cases, limited geographic focus, political and economic instability, and relatively illiquid markets. The Fund is subject to interest rate risk, which is the risk that debt securities in the Fund’s portfolio will decline in value because of increases in market interest rates. The Fund may also invest in derivative securities which can be volatile and involve various types and degrees of risk. In addition, the Fund is not a money market fund and therefore it does not seek to maintain a stable net asset value (NAV). For a more complete discussion of these and other Fund risks, please refer to the Fund’s prospectus. Foreside Fund Services, LLC, distributor.
*Source: Bloomberg. The two share classes of the Merk Absolute Return Currency Fund, Institutional Shares (MAAIX) and Investor Shares (MABFX), took first and second place, respectively, of all funds in the Bloomberg Currency category. Bloomberg Fund Screener rankings are based on total return for the 1 year period ending 9/30/2013. Rankings shown are for Institutional Shares and may be lower for Investor Shares due to higher fees and expenses. Rankings are relative to a Bloomberg Fund Screener category, for all open-end funds in the USA, with a Fund objective of Currency. Funds are ranked within a universe of funds similar in investment objective as determined by Bloomberg. The lower the number rank, the better the Fund performed compared to other funds in the classification group. The highest rank is 1 and the lowest rank is 54. Past performance is no guarantee of future results.
**Source: Bloomberg, Merk Investments. 3-year period: 9/30/2010 - 9/30/2013.
Standard Deviation: a measure of historical volatility of the returns of the investment.
Sharpe Ratio: a measure of risk-adjusted performance of the returns of the investment.
Correlation: a measure, ranging in value from 1.00 to -1.00, of the historical association between returns of two investments.
Joe Paone, Merk Investments LLC, (650) 323-4341 x115, [email protected]
Share this article