Commodity Currencies

Wisdom Tree's relatively new actively managed commodity currency ETF (CCX) is of interest to me as a diversification out of the dollar.  CCX seeks to achieve total returns reflective of both 1) money market rates in selected commodity-producing countries available to foreign investors and 2) changes to the value of these currencies relative to the U.S. dollar.   Constituent currencies at launch were the Australian Dollar, Brazilian Real, Canadian Dollar, Chilean Peso, Norwegian Krone, New Zealand Dollar, Russian Ruble and South African Rand.  Though it's bounced higher for the past two months, the dollar longer term faces a precarious future as it's place as the world's reserve currency is in doubt. 

Wisdom Tree clearly states CCX is not a money market style fund.  Someone wrote that it could be considered akin to an ultra short bond fund.  I'm not so sure as the "commodity currencies" took a big whack in 2007 and a 30% drop doesn't sound like a very bond like to me.  In fact, it's downright scary.  Nonetheless, if I had to pick dollars or a basket of commodity currencies as an investment for the next 10 years, I'd chose latter.

So here's the plan.  We'll sell some of our hard asset investment MERKX and replace it with CCX.  Not everyone favors the trade, but an emphasis on hard assets has been good to us.  We'll stick with what's been working.