Daily ETF Watch: ‘MERK’ Nearing Launch

December 04, 2013

Is it time to buy gold?

Axel Merk is closing in on his plans to bring an ETF version of his actively managed Merk Hard Currency Fund (MERKX) to market. A new filing details the fund’s expenses at 0.79 percent, or $79 for every $10,000 invested, and suggests that the fund may roll out sometime early in the second quarter of 2014.

The ETF, which will trade on NYSE Arca with the ticker “MERK,” is a dollar-short strategy and will normally bet on a basket of hard-currency-denominated investments composed of high-quality, short-term debt instruments, including sovereign debt. It will also own gold and gold-related securities.

The firm considers gold a hard currency because, unlike other currencies, it does not derive its value from governmental regulation and it’s a tangible asset, according to the filing. MERK, as noted, is the ETF version of the $355.3 million mutual fund, MERKX. That mutual fund is down 3.7 percent year-to-date.

Merk, in an investment note, said that while gold has performed rather poorly this year and is increasingly being written off, those dismissing gold should think twice about where they see the economy and the Fed heading.

“If one believes we will return to a ‘normal’ environment and we’ll live happily ever after, maybe those gold naysayers have a point,” Merk wrote. “But keep in mind that incoming Fed Chair Janet Yellen stated during her confirmation hearings that we shall return to a normal Fed policy once the economy is back to normal.”

The latest prospectus looks like it will be effective Jan. 1, 2014, and because the ETF’s fiscal year ends March 31, it seems a decent bet that the fund could go live in April 2014.

There were no other filings or launches this morning.

 

 

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