Good Morning South Dakota

We are in South Dakota for the week. More on that in a moment.

IndexUniverse had a post the other day looking at some ETFs that are in the pipeline. The article seemed to imply that the ten funds the profiled would begin trading soon but I am not sure if that is the case (and maybe the article was not implying they’d be out soon).

The first fund in their list was the Index IQ Physical Diamond Trust. I had a little fun with this one when it was first filed for by Index IQ. This will be a difficult asset class to track and consistency of the stones will require some extra work as well. I am not aware of any sort of capital market proxy for diamonds and so if that is true the fund will be breaking new ground. That is good because it will offer something new to investors and it is bad because things may not work as smoothly a they hope. The fun with this idea is the Jason Bourne’s safety deposit box aspect of the fund and the possibility that when it starts out the entire AUM of the fund will fit into one envelope.

The next fund on the list was the CurrencyShares Singapore Dollar Trust. The Sing dollar has safe haven attributes but it runs on the small side. When CurrencyShares first started issuing funds I asked them about a Sing dollar fund and there were logistical issues that apparently have been overcome. I believe that stashing some money in assorted, select currencies is a valid concept even if difficult to implement. My take on the concept is not an end of society thing, more of a slow deterioration in the value of the USD and ETPs offering the exposure would be good enough.

Kind of related from the list is the Merk Hard Currency ETF (HRD) which will apparently own both currencies (active management) and gold. WisdomTree has a couple of interesting currency funds and this seems like it will cover some of the same ground but again HRD will be actively managed.

There were also several emerging market/frontier market types of funds including a Sri Lanka country fund from from Global X. Sri Lanka got some attention in the last few years for being one of the top performing markets one year and Jim Rogers made the rounds extolling the country’s virtues. I would be more interested in Kazakhstan and Mongolia.

Zooming out a little it is interesting to look at different and now investable asset classes or market segments that may not have been previously accessible. To yesterday’s post, if a sophisticated, well diversified portfolio can be simply constructed with a handful of holdings bought at $8 per trade then you have two of the four things mentioned yesterday; diversification and asset allocation. You still need to save and you have to avoid panic.

As mentioned above we are in South Dakota for the week, we got here yesterday. We’re staying at Custer State Park for two days and then on to the Black Hills for two days. The scenery here is amazing and of course there is some old-west history to check out too.

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