Murky MERKX

The Merk Hard Currency Fund (MERKX) was my first foray into hard asset investing.  Here a snapshot of the MERKX portfolio from the latest annual report:

foreign bonds	44.1%
foreign treasuries	42.2%
US treauries	1.2%
gold	9%
foreign currencies	2.9%
other	.9%

Foreign holdings are generally from countries touted as "strong" such as Canada, Singapore, Australia, and Norway.  Everbank is one source of information on different currencies.

My original enthusiasm for MERKX is waning.  These days, a 1.3% expense ratio is practically an insult.  In my case there's also a $50 redemption fee for withdrawals sooner than 180 days.  Such policies, necessary as they may be, push me towards ETFs.  Axel Merk, the fund's manager, has been steadfast in his faith in the Euro.  He explains his rationale in this Forbes interview.  I'm dubious given all the turmoil in Europe, but the jury is still out.

MERKX has returned 6% since purchased in August 2009.  It's a narrow field-- at the moment I don't see better choices.  When we have country specific bond ETFs it will be time to reconsider.