search query: @journal_id 75 / total: 683
reference: 264 / 683
| Author: | Madura, J. Soenen, L. |
| Title: | Use of levered mutual funds to capitalise on long-term currency trends. |
| Journal: | Management Decision
1990 : VOL. 28:3, p. 10-13 |
| Index terms: | UNIT TRUSTS INVESTMENT PLANNING CURRENCY GEARING |
| Language: | eng |
| Abstract: | How investors can capitalize on a long-term currency trend by leveraging their investment in a mutual fund is investigated. The sensitivity of mutual fund yields to exchange rate movements and the degree of leverage is tested for a strong dollar cycle (1981-1984) as well as for a weak dollar cycle (1985-1987). The empirical results provide evidence of the benefits derived from leveraging investments in mutual funds in anticipation of a long-term trend in the home-currency's value. To facilitate the foreign leveraging by the small investor, the creation of foreign levered mutual funds is suggested. While this study was performed from the USA perspective, the general implications apply to investors in any country. |
SCIMA