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Subject:  Bond Funds, Again Date:  1/7/2013  3:34 PM
Author:  globalist2013 Number:  34610 of 35623

I can’t keep track of the trains of thought I’m pursuing in my posts. So I don’t even try, much less worry about the fact that I might have argued a point in opposite directions. But somewhere in my travels, I suggested that PCY (rather than EMB) was the purer play on foreign sovereigns and that a partial explanation of why PCY was being bid up was its inverse relationship to the US dollar. In other words, to go long PCY was the same as shorting UUP. Well, things weren’t that simple, as doing rolling, 1-month correlations soon discovered. Sometimes, the two did move inversely. Sometimes, in lockstep. You can repeat the demo, but you needn’t, because a picture gives a better idea of what’s going on.;range=2y;c... From there, I wandered into currency funds generally, and ending up creating the following chart for DBV, which is a fund that goes short three of the G10 currencies (currently, EUR, JPY, CHF) and long three offsetting ones (currently, AUD, NZD, NOK).