Merk Investments has launched the Merk Hard Currency Fund, which will allocate assets over wide spectrum of high-quality, short-term money market instruments of countries perusing sound monetary policy, thereby hedging its U.S. investors' money against depreciation of the dollar.
"Because global imbalances are the greatest in history--as evidenced by the U.S. current account deficit--and administration monetary policies have been and are likely to remain consistent, the dollar is positioned to continue its decline relative to the Euro and other hard currencies," said Merk President Alex Merk.
Investors in the U.S. have expressed a growing interest in foreign currencies and foreign currency-denominated investment accounts due to the dollar's ongoing decline since early 2002. Strong Asian equity and currency markets, particularly in China, have also fueled interest and sparked interest among some investors in mitigating their credit risk.
The new fund will concentrate on hard currencies such as the Euro, Sterling, Canadian dollars, Swiss Francs, and heavily on the Australian dollar. In addition, the fund will greatly invest in gold. One currency the fund plans to avoid, at least at the outset, is the Yen, due to Merk's negative attitude towards Japanese fiscal and monetary policy.
With the initial $1 million in assets, the Merk Hard Currency Fund is planning to reach $100 million within a year.