By Gary
Scott
This message looks at a MultiCurrency Sandwich
portfolio that invests in Emerging Asia. Many investors feel
that emerging Asian markets are solid places to park assets
and that Asian currencies are undervalued because
Asian governments are building up assets while American and
European governments pile up debt. One great feature of the
MultiCurrency Sandwich strategy is that it can reinforce many
ideas such as building an emerging
Asian portfolio.
Asian MultiCurrency Sandwich
Starting Date 10/21/05
$100,000 Invested & $200,000 Borrowed
$Amount Currency Investment Price Yield Amount % of Invested
75,000 USD-Rupees J I Indian Equity Fund 163.60 - 75,000 25
75,000 USD-Yuan JI Chinese Equity Fund 128.30 - 75,000 25
75.000 JPY JI Japanese Equity Fund 8679.00 - 75,000 25
75,000 USD JI Emerg Mkt Bond Fnd 242.10 75,000 25
300,000.00 300,000.00 -
Investments Total Value 300,000.00
Invested $100,000
Loan $200,000 100.00% JPY at 1.63%
Loan cost $3,260
This portfolio is far more speculative than the other three
multicurrency sandwiches we have viewed. It is more directed
at capital growth so there is a much lower income which we
will not attempt to estimate or predict. Overall this portfolio
has the greatest overall profit potential. For example if
each of these funds rose 12% in a year the gross gain would
be $36,000. After the $3,260 loan cost the profit would be
$32,740 or 32.7% increase on the original $100,000 invested. This portfolio diversifies investments into a basket of
Asian currencies, plus is hedged since the loan and a portion
of the portfolio are in Japanese yen. Investments in Asia make sense and this Multicurrency Sandwich
increases the profit potential in this fact. Until next message, good investing. Gary |
