Saturday, July 5, 2014

Sold 102+ GDO at $18.79-Regular IRA/Sold Roth IRA: 200 JTP at $8.38, 107+ NBB at $20.26/Bought 100 ICLN at $11.85/Sold 100 FPF at $22.83/Bought 100 MSPRA at $20.19-Roth IRA/Paired Trade: Sold 155+ ENY at $17.55 and Bought 100 EWC at 32.11/Texas Industries 9.25% Senior Bond Redemption

Last Thursday's Closing Prices: 
Both the DJIA and S & P 500 closed at all time records
S & P 500 1,985.44 +10.82 (+0.55%)
DJI: 17,068.26 +92.02 (+0.54%) : Dow Jones Industrial Average
VIX: 10.32 -0.50 (-4.62%) : VOLATILITY S&P 500
VXN: 11.36 -0.23 (-1.98%) : CBOE NASDAQ 100 Volatility
TLT: $110.68 -0.40 (-0.36%) : iShares 20 Year Treasury Bond ETF
IEF: $102.42 -0.21 (-0.20%) : iShares 7-10 Year Treasury Bond ETF
VNQ: $74.63 -0.43 (-0.57%) : Vanguard REIT ETF
KRE: $41.14 +0.68 (+1.69%) : SPDR S&P Regional Banking ETF
GLD: 127.16 -0.54 (-0.42%) : SPDR Gold Trust
VWO: $44.01 +0.23 (+0.53%) : Vanguard FTSE Emerging Markets ETF
VEU: $53.05 +0.22 (+0.42%) : Vanguard FTSE All World Ex US ETF
XLI: $54.75 +0.45 (+0.83%) : SPDR Select Sector Fund - Industrials
XLU: 42.50 -0.47 (-1.09%) : SPDR Select Sector Fund - Utilities

Big Picture Synopsis:

Stable Vix Pattern: Bullish 
Short Term: Market Needs a 15% Correction
Intermediate Term: Slightly Bullish
Long Term: Bullish

The Swiss based Bank of International Settlements, which is basically a central bank for the central banks, warned last week that stock markets were "euphoric" and detached from reality. BIS urged central banks worldwide to start raising interest rates. Bank for International Settlements - Wikipedia

The warnings was contained in the BIS annual report: (see pages 3, 15-16, 20-21)

The U.S. stock market responded to those words of caution by hitting new all time highs last week.

The histrionics from those caught flat footed over the past several years has gone up several decibel levels. John Hussman latest missive is an example. "The Delusion of Perpetual Motion - June 30, 2014 If I had the performance record of the Hussman Strategic Growth (HSGFX) fund over the past ten years (an annualized total return of -1.43 as of 6/30/14), I would be reluctant to show my face in public and would feel an irresistible need to wear a bag over my head when venturing outside. But, each investor needs to decide whether a pundit who has been so wrong may turn out be right now. In my opinion, Hussman lacks balance.

Yardeni Research regularly updates a publication that contains several charts depicting stark market valuation models and metrics:

Short to Long Term: Slightly Bearish Based on Interest Rate Normalization
The Difficult Path to Interest Rate Normalization

If inflation and inflation expectations continue to creep up, I will have to change the slightly bearish tilt to a more bearish category. The slightly bearish categorization assumes no more than an average 2.25% annual inflation rate over the next years.

Some arguments for persistently low interest rates can be found in this Bloomberg article.

Bonds reacted negatively to last week's economic reports.

The break-even spread closed last Friday at 2.28%, the average annual rate of inflation necessary for the buyer of the ten year TIP to break-even with the buyer of the non-inflation protected ten year treasury. The break-even spread is regarded as the market's prediction for future inflation.

JP Morgan estimates that the FED will start to tighten in the 2015 third quarter and will end that year at a 1% federal funds rate and at 2.5% by 2016 year end. {Barron's: second from last paragraph} Another tidbit contained in that article is a reference to Monsanto partly funding a $10B share purchase program with $4.5B in new debt. Prospectus

Recent Developments: 

The BLS reported a 288,000 increase in nonfarm payrolls for June. The number for April was revised from +282,000 to +304,000. The unemployment rate declined to 6.1%. The participation rate remained unchanged at 62.8%. Over the past 12 months, average hourly earnings have increased by 2%. Employment Situation Summary

The ISM Services PMI for June was reported at 56%. New orders increased to 61.2 from 60.5. 

The ISM Manufacturing PMI for June was reported at 55.3%. New orders increased to 58.9 from 56.9 in May.

WardsAuto reported that auto sales rose to a seasonally adjusted pace of 16.9M units in June, the highest rate since July 2006. June 2014 U.S. Sales;  Reuters.

ADP estimated that 281,000 private sector jobs were created in June. ADP National Employment Report The consensus estimate was 210,000.

Texas Industries 9.25% Senior Note Maturing in 2020:

I received a notice that the Texas Industries 9.25% senior unsecured note maturing in 2020 was going to be redeemed by the issuer. Martin Marietta (MLM) just completed its acquisition of TXI.

MLM, which has an investment grade bond rating, quickly called this note for redemption. MLM will sell $700M in senior unsecured notes to raise the necessary cash. Fitch Rates Martin Marietta's Proposed $700MM Sr. Notes Offering 'BBB-'; Outlook Stable

The Texas Industries note requires a premium payment for an optional redemption. Prospectus at pages 41, 76

This note closed last Thursday at 113.44. Bonds Detail

I own just one $1,000 par value bond. Bought 1 Senior Texas Industries 9.25% Bond Maturing 8/15/2020 at 97.5 (7/18/11 Post)


1. Sold 200 JTP at $8.38-Roth IRA (see Disclaimer): I am continuing to de-risk the IRAs by selling leveraged bond/preferred stock funds into the bond rally. I am content with the Y-T-D numbers for the entire year. 

Snapshot of Trade:

2014 Roth IRA Sold 200 JTP at $8.38

Snapshot of Profit:

2014 ROTH IRA 200 JTP +$154.9
Bought 200 JTP at $7.53-Regular IRA (10/14/13 Post)

Dividends Received=$93.6

Total Return: $248.5 or 16.42%

Security Description: The Nuveen Quality Preferred Income Fund (JTP) is a leveraged closed end fund that invests in preferred stocks and bonds. Credit quality is weighted in BBB rated securities at 68.1% of assets. JTP

Sponsor's website: JTP - Nuveen Quality Preferred Income Fund (210 holdings as of 5/31/14)

CEFConnect Page for JTP

Last SEC Form N-Q (holdings as of 4/30/14)

Data as of 6/19/14:
Closing Net Asset Value Per Share: $9.31
Closing Market Price: $8.39
Discount: -9.88%

Rationale: I am not trying to hit home runs in the IRA accounts. My primary emphasis is to preserve capital and secondarily to generate income. I am satisfied with JTP's total return of 16.42% in about 9 months. As noted many times, I am concerned about interest rate risk and the disconnect between bond/preferred stock yields and inflation.

For leveraged CEFs, a rise in the federal funds rate starting next year will increase their borrowing costs.

Last Thursday's Closing Price: JTP: $8.45 -0.05 (-0.59%) 

2. Sold 102+ GDO at $18.79-Regular IRA (see Disclaimer):

Snapshot of Trade:

2014 Roth IRA Sold 102+ GDO at $18.79
Snapshot of Profit:

2014 Regular IRA GDO 102+ Shares +$85.27
Item # 7 Bought 100 GDO at $17.79-Regular IRA (10/24/13 Post)
Total Return: $132.11 or 7.39% (holding periods 8+ months)

Security Description: The Western Asset Global Corp Defined Opportunity Fund (GDO) is a leveraged world closed end bond fund. GDO will liquidate on or about 12/2/2024. This gives the fund one of the characteristics of an individual bond, the promise to return an investor's money at a time certain. However, unlike an individual bond, there is no promise to pay a fixed sum (i.e. par value). The investor in GDO will simply receive their pro-rata share of the liquidation proceeds, which may be more or less than the current net asset value per share. The current discount to net asset value does provide some cushion.

According to the sponsor, the duration is relatively short at 4.1 years as of 3/31/14. Portfolio Characteristics

Credit Quality as of 3/31/14:

CEFConnect Page for GDO

Data as of 6/19/14
Closing Net Asset Value Per Share: $20.63
Closing Market Price: $18.8
Discount: -8.87%

Last SEC Filed Shareholder Report: WA Global Corporate Defined Opportunity Fund Inc (period ending 4/30/14)

As of 4/30/14, GDO had net unrealized appreciation of $30.638+M (note 3 at page 32)

Prior Trades: I currently own over 475 shares with my most recent purchases discussed in these posts: Item # 4 Added 100 GDO at $18.06 (2/25/14 Post)Item # 7 Bought 50 GDO at $18.03 (11/19/13 Post); Item # 7 Bought 100 GDO at $17.79-Regular IRA (10/24/13 Post); Item # 4 Added 50 GDO at $17.58-Roth IRA (6/29/13)

Completed round trip transactions are discussed in the following posts:

Bought 100 of the CEF GDO at $18.6 March 2010; Bought 70 of the CEF GDO in Regular IRA at $18.61 March 2010; Bought 200 of the CEF GDO at 18.63 and 18.53 (100 in Roth and 100 Taxable Account respectively) March 2010; Bought 200 of the CEF GDO at 18.63 and 18.53 (100 in Roth and 100 Taxable Account respectively) March 2010;  Bought 100 GDO at $18.57 April 2010; Bought Back 50 shares of GDO at 17.8 in the Roth IRA previously sold at $19.24 December 2010; Sold 100 GDO at $18.72 January 2012Sold 200 GDO at $19.18 June 2012; Sold Remaining GDO in Taxable Account at $19.69 July 2012Bought 100 Shares of GDO at $18.9 November 2012Sold 100 GDO at $20.79 December 2012; Paired Trade Roth IRA: Sold 120 GDO at $20.73; Sold 120 GDO at $20.73 (February 2013)

I have not bothered to take snapshots of every realized gain.  I have been content harvesting numerous small gains after collecting several monthly dividends. Some of the gains are captured in these snapshots:

2013 Roth IRA GDO 120 Shares +$340.33
2012 GDO 436 Shares +$310.24
2011 Roth IRA 250 Shares +$65.78
Realized Gains: $701.62

Rationale: I am satisfied with my YTD gains in my retirement accounts. I am consequently content to coast with a higher than normal allocation in cash for several months and simply wait for better opportunities to buy income generating securities. My emphasis in on capital preservation first and income generation second. The Y-T-D gains provide me with a cushion to wait and see.

I currently own 216+ GDO shares in a Roth IRA account where I am reinvesting the dividends.

Future Buys/Sells: I am in a trading mode for this security. This last transaction simply reduced my overall position by a tad. I may be more likely to add 100 shares in my taxable account where I have built up my cash allocation more. I currently own 258+ shares in a taxable account and recently changed my distribution option from reinvestment to payment in cash.

Last Thursday's Closing Price: GDO: $18.45 -0.12 (-0.65%)

3. Sold 107+ NBB at $20.26-Roth IRA (see Disclaimer): I recently bought 100 shares of NBB in another Roth IRA account held at Vanguard. Roth IRA: Added 100 NBB at $20.1 The following transaction occurred in the Fidelity Roth IRA.

Snapshot of Trade:

2014 Roth Sold 107+ NBB at $20.26

Snapshot of Profit:

2014 ROTH IRA 107+ NBB +$91.33
I received one more monthly dividend, which was not yet shown in the preceding snapshot, on 7/1/14. Nuveen Build America Bond Fund (NBB) Dividend Date & History

Dividends= $145.77
Total Return: $237.1 or 12.25% on 100 share purchase cost

Security Description: The Nuveen Build America Bond Fund (NBB) owns taxable municipal bonds issued under the now expired Build America Bond program. The fund will liquidate on or before 6/30/2020.

CEFConnect Page for NBB

Data for 6/20/14:
Closing Net Asset Value: $22.05
Closing Market Price: $20.28
Discount: -8.03%

NBB Page at Morningstar

Last SEC Filed Shareholder Report (period ending 3/31/14)

Prior Trades: My history with this security can be found in my June 14, 2014 post discussing the 100 share buy executed on 5/30/14. Item # 1 Roth IRA: Added 100 NBB at $20.1

Rationale: While the FED and the market do not appear to have concerns about inflation heating up as the FED continues ZIRP, I am not so sanguine about it.

As recently discussed, this fund has the longest duration of any bond fund that I currently own. The leveraged average duration was 13.47 years as of 5/31/14. That was up from 12.2 years as of 4/30/14, when I last looked at that number. This increase in duration will work provided interest rates go down. The potential downside risks are substantial with just a one percent rise in rates. I decided to lighten up on NBB after buying 100 shares on 5/30/14, in effect taking me slightly below my position prior to adding that 100 share lot.

Future Buys/Sells: It is more likely that I will sell the remaining 150 shares held in a Roth IRA than to buy more due to my increasing concerns about interest rate risk. I could keep the lowest cost 100 share lot bought at $20.1 to address in part the low probability Japan Scenario.

Last Thursday's Closing Price: NBB: $20.17 -0.10 (-0.49%)

4. Sold 100 FPF at $22.826 (see Disclaimer): This security was bought as part of a paired trade which occurred on 4/11/14: Paired Trade: Sold 100 MSPRA at $20.21 and Bought 100 FPF at $22.12 (April 26. 2014 Post) In that trade, I realized a $116.98 profit on the 100 MSPRA shares after netting $203.08 in dividend payments (see history snapshot in preceding link).

I went back to MSPRA after selling FPF (see Item # 5 below). In a fashion, the pared trade worked a little, since I was able to buy MSPRA back at near the previous sell's price without missing a dividend payment, and made a profit on the FPF shares plus two monthly dividend payments. Just another example of small ball.

Snapshot of Trade:

2014 Sold 100 FBF at $22.826

Snapshot of History:

Snapshot of Profit:

2014 FPF 100 Shares +$56.55
I received two monthly dividends payments totaling $30.5.

Total FPF Return: +$87.05 or 3.92% (holding period about 2 months)

Security Description: The First Trust Intermediate Duration Preferred & Income Fund (FPF) is a leveraged CEF that invests in bonds and preferred stocks with the objective of generating current income and managing duration of between 3 to 8 years, excluding the duration adjustment for leverage which increases duration.

Data For 6/20/14:
Closing Net Asset Value Per Share: $24.79
Closing Market Price: $22.83
Discount= 7.91%

Prior Trades: I still own 50 shares in a Roth IRA: Bought 50 FPF at $22.07 (4/26/14 Post).

Rationale: The same rationale exists for this disposition, and relate to my concerns that bonds and preferred stocks are currently being mispriced in relation to inflation and inflation expectations.

This opinion is causing hyperactive trading among leveraged bond/preferred stock CEFs.

Another issue is that even the dovish and accommodative FED is predicting a rise in short term rates, probably to 1+% by year-end 2015 and 2+% by year-end 2016 (see "appropriate pace of policy firming" at FRB: June 18, 2014: FOMC Projections materials)

Assuming those are good estimates, the rise in short term borrowing costs will impact leveraged CEFs adversely, and will be impossible to predict when the market will start to front run that eventuality.  

Future Buys/Sells: I will consider adding this one back when the yield exceeds 8% or as part of a paired trade designed to increase my income generation. I may sell the remaining 50 shares held in the Roth IRA at anytime.

Last Thursday's Closing Price: FPF: $22.23 -0.32 (-1.42%)

5. Bought 100 MSPRA at $20.19-Roth IRA (see Disclaimer): This security went ex dividend shortly after my purchase. I have convinced myself that the floating rate equity preferred stocks can be traded, but recognize that my past success may not be prologue.

Generally, I tend to favor the floaters when their current yields are 2% or less than the fixed coupon equity preferred stocks from the same issuer. I am willing to lose up to 2% in yield for the unexpected inflation protection built into the floaters. The floaters become more interesting to me when I give up less than 1.5% in current yield. That is in part due to a lack of need for the income difference.

The issuer, Morgan Stanley, has one fixed coupon and two fixed to floating rate equity preferred stocks outstanding. I calculated the current yields based on the closing prices 6/27/14:


Morgan Stanley Preferred Series G (MS.PG)-Price $25.56/Yield 5.477%/6.625% coupon
Optional Call: 7/15/19 or anytime thereafter

Fixed-to-floating rate (mostly a gimmick in my view since the issuer will call at the time for the transition when it is in their interest to do so):

Morgan Stanley Preferred Series F (MS.PF)-Price $27/Yield 6.33%/6.875% coupon
Optional Call on or after 1/15/2024

Morgan Stanley Preferred Series E (MS.PE)-Price $28/Yield 6.38%/7.125% coupon
Optional Call on or after 10/15/23

All of the foregoing pay non-cumulative and qualified dividends and have $25 par values. All have the same junk ratings: Ba3 from Moody's and BB+ from S & P.

The current yield on MSPRA is about 4.95% at a total cost of $20.19 per share.

Snapshot of Trade:

2014 Roth IRA Bought 100 MSPRA at $20.1857

Security Description: The Morgan Stanley Non-Cum. Pfd. Series A (MS.PA) is an equity preferred stock that pays non-cumulative and qualified dividends at the greater of 4% or .7% above the 3 month Libor rate on a $25 par value. Prospectus

Advantages and Disadvantages of Equity Preferred Floating Rate Securities

Prior Trades: I have repeatedly bought and sold this security. Prior to this last trade, I was down to a 50 share lot purchased in a taxable account: Bought 50 MSPRA at $16.6 (September 2011)

Links to prior discussions and trade snapshots can be found in Item # 1 Paired Trade Roth IRA to Increase Cash Flow: Sold 50 MSPRA at $20.22 and Bought 50 FPF at $22.07 and in Item # 5 Bought 50 MSPRA at $19.25-ROTH IRA.

Total Realized Gains=$1,203.08

The largest gain was $839.29: Bought 100 MSPRA at $12.88 in May 2009-SOLD 100 MSPRA at 21.43 (January 2010)

2010 MSPRA Two Trades: +$962.87
I have been trading this security for much smaller gains after this trade.

Rationale: The main advantage is that this security addresses the low inflation and problematic inflation scenarios in the same security. The low inflation scenario is addressed by the minimum 4% coupon, while the Libor float provides some protection when short term rates are rising to problematic levels. When and if Libor rises above 3.3% during the relevant computation period, the coupon will start to rise. At a 6% 3 month Libor, the coupon increases to 6.7% which would result in about a 8.3% yield at a total cost of $20.18 per share during that hypothetical computation period.

As previously noted many times, it may be a long wait before the 3 month Libor triggers an increase in the minimum coupon.

The investor is giving up current income by buying the floater rather than the functionally equivalent fixed coupon preferred stock.

The question is how much income is an investor willing to give up now for the floaters problematic inflation protection.

I outlined my views on that subject above. I would note that I am trading these securities until I have a better feel for the likelihood of inflation becoming a problem which could cause unexpected large increases in the federal funds rate for a FED currently stuck at zero. If I see that on the horizon, I will own more floaters than I do now.

Risks: I have discussed risks of equity preferred floaters throughout this blog. If MS does a Lehman, MS preferred stock certificates would likely have a value lower than toilet paper.

A long term chart of this security highlights the downside risk.  The price hit the single digits during the recent Near Depression: MS.PA Stock Chart

Volatility risk is high for equity preferred stocks during times of market stress. Fear and Enhanced Volatility in Certain Classes of Income Securities (August 2011 Post)

During the interest rate spike period last year, the floaters did worse than the fixed coupon equity preferred stocks. The rise in rates then was not due to inflation or an upward revision in inflation expectations. Both inflation and inflation expectations went down during that period. The rate rise was due to the interest rate normalization process, probably just the first salvo, and this cause simply made the equity preferred floaters with their lower minimum coupons less competitive in yields without providing any upside hope of a coupon increase.

Future Buys/Sells: There is no way for me to predict now what I will do with any floating rate preferred stock.

Last Thursday's Closing Price: MS-PA: $20.34 +0.11 (+0.54%)

6. Bought 100 ICLN at $11.85 (see Disclaimer):

Snapshot of Trade:

2014 Bought 100 ICLN at $11.85

Security Description: The iShares Global Clean Energy ETF (ICLN) is an ETF that focuses on owning "clean energy" stocks. Many foreign companies are owned by this fund which brings into the mix country and currency risks.

Top 20 Holdings as of 6/23/14:

The third holding, Covanta Holding, was recently highlighted in a positive Barron's article.

Sponsor's webpage: iShares Global Clean Energy ETF | ICLN (31 holdings; .47% expense ratio)

While the return over 1 year looks fantastic at 55.12% (as of 6/23/14), the average annual return over a 5 year period is -6.03% based on the market price. The ICLN price was over $50 at inception back in 2008: iShares S&P Global Clean Energy ETF Chart

Rationale: I really do not know enough about this sector to pick individual stocks. However, I recognize the potential for alternative energy long term, given the level of pollution emitted by fossil fuel generation and the understandable reluctance to build expensive nuclear plants, particularly in the U.S.

The dividend yield will be insignificant. I did not realize on this one that I bought shortly before the ex dividend date for a semi-annual distribution.

That distribution just about pays for my brokerage commission after tax.

Risks: The chart referenced above highlights the risks. Until recently, this sector ETF has been a widow maker.

An industry trade association noted recently that the price of "a solar panel had declined by 60% since the beginning of 2011" through the end of 2013.  Solar Industry Data | SEIA

The sponsor discusses risks starting at page S-3 of the prospectus:

There are a variety of regulatory risks. Recently, the U.S. slapped new import duties on Chinese solar products. Reuters

Future Buys/Sells: I am unlikely to buy more. I may let this one germinate for an extended period given my small exposure and the long term potential upside.

Last Thursday's Closing Price: ICLN: $11.98 +0.16 (+1.35%)

7. Paired Trade: Sold 155+ ENY at $17.55 and Bought 100 EWC at $32.11 (see Disclaimer):

Snapshots of Trades:


2014 Sold 155+ ENY at $17.55

Bought 100 EWC at $32.11
Snapshot of ENY Profit:

2014 ENY 155+ Shares +$296.37
Item # 4 Added 50 ENY at $14.04; Added 50 ENY at $15.6Bought 50 ENY at $16.83;

Security Descriptions: The Guggenheim Canadian Energy Income ETF (ENY) is an ETF that owns Canadian energy companies.

Sponsor's Website: ETF (net expense ratio for an ETF is high at .7%)
ENY Holdings
ENY Page at Morningstar (rated 2 stars)

The iShares MSCI Canada ETF  (EWC) is a U.S. index fund for Canadian stocks that targets an 85% access to the Canadian stock market primarily through large and mid cap stocks.

EWC went ex dividend for its variable semi-annual distribution on 6/25/14:

Generally, a slightly larger distribution is paid in December. In 2013, EWC paid a total of $.691355 per share in ordinary dividends. No long term gains have been paid since 2000. EWC Distribution History

Sponsor's webpage: iShares MSCI Canada ETF | EWC (expense ratio is .48%; 96 holdings a of 6/23/14)

Top 25 Holdings as of 6/23/14:

iShares MSCI Canada Page at Morningstar (Not Rated)

Prior Trades EWC: I have periodically traded EWC for small gains and have generally held that small position for a few weeks.

2006 EWC 100 Shares +$157.19 (1+ month)
2007 EWC 100 Shares +$120.93 (41 days)
2008 Regular IRA 30 Shares +$136.49 (3+ months)
2009 Roth IRA 30 Shares +$53.58

Total Realized Gains:  $468.19 

Prior Trades ENY: I have had some prior small ENY trades:

2008 ENY 140 Shares +$138.73

2009 ENY 50 Shares +$90.97
2009 Roth IRA ENY 30 Shares +$53.58
2012 ENY 50 Shares +$37.58
Total Prior Realized Gains: $320.66
Total Realized Gains: $617.03 ($320.66 + most recent trade $296.37)

Rationale: When I made this paired trade, I jotted down the reasons for it.

1. EWC was up only about 1/2 as much as ENY so far this year.

iShares MSCI Canada (EWC) Total Returns
Guggenheim Canadian Energy Income ETF (ENY) Total Returns

2. The Canadian stock index has substantially underperformed the U.S. S & P 500 over the past 18 months. EWC's net asset value per share increased only 5.41% in 2013 and 8.84% in 2012, compared to SPY's total return of 32.21% and 15.99%:

SPDR S&P 500 (SPY) Total Returns

3. I acquire a broader exposure to Canadian stocks which includes the energy stocks owned by ENY, so I maintain some exposure through EWC to this sector.  I also acquire through EWC exposure to other Canadian natural resource and mining stocks, including several gold miners.

4. I maintain exposure to the CAD via a USD priced ETF that owns Canadian stocks after the CAD broke above its 200 day SMA line versus the USD.

CAD/USD Currency Conversion Chart

Risks: Generally speaking, I would anticipate less risk for country index fund than for a country index fund confined to a specific sector. EWC is more diversified than ENY.

If the CAD turns down in value against the USD, this will negatively impact the price of EWC.

While there is always country risk, this risk is not anywhere near the top of my worry list which would be the case for an ETF owning stocks based in Russia, China, and South America.

Last Thursday's Closing Prices:
EWC: $32.54 +0.15 (+0.46%) : iShares MSCI Canada Index Fund
ENY: $17.57 +0.07 (+0.40%) : Guggenheim Canadian Energy Income Fund 

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