June 18, 2008
China A Share Fund
Readers suggested shorting the Morgan Stanley China A Share Fund (CAF) as a way to take advantage of the stock slide in China. I looked at the holdings of the fund (as of 3/31/08) and they only held 33 positions, including six stocks listed in Hong Kong with the remainder being Shenzhen- and Shanghai-listed A shares. This actively managed fund is not the best mirror of the Index as the managers try to earn their 1.73% fee through superior stock picking. Anyway, here is the performance chart of the CSI 300 Index and CAF, along with CAF’s short interest chart.
Cat: | Time: 8:01 pm (utc+8)
June 18th, 2008 at 9:56 pm
The CAF does not seem to outperform the market during the past two years. A shift of “time zero” may offer different results?
Shorters should be aware of the need of an upward B-wave correction here. And the Olympics is coming.
June 23rd, 2008 at 3:49 am
The other things to be considered for shorting this closed-end fund are: 1. discount or premium and yield. Closed end fund is not always at its NAV (Net Asset Value) of its holdings. CAF is already at discount, which means, investors are already paying less than NAV. Shorting a fund at discount carries some additional risk than shorting a stock. 2. The yield. Typically, the lower the yield is, the less chance for price declining. CAF is a low yield fund.
For other China-related EFTs, Funds and stocks, please visit http://www.hometownstocks.com/index.php?hometown=china.
June 23rd, 2008 at 7:37 am
i use www.cefa.com for premium/disco figures for closed end funds.