Opinions of FAX please.

[David Briggs]

If you are cautious and treasury-oriented but want to diversify away from the U.S. Dollar for a portion of your portfolio, what do you think of FAX?

Is the present yield sustainable? Monthly dividends have been stable for quite awhile. But that can change in an instant.

[Stas1976]

If you are cautious and treasury-oriented but want to diversify away from the U.S. Dollar for a portion of your portfolio, what do you think of FAX?

Is the present yield sustainable? Monthly dividends have been stable for quite awhile. But that can change in an instant.

Can you explain a little bit what this position is? I am not a pro.... What is the stock that can pay such a huge dividend?

[David Briggs]

Here is its profile from etfconnect.

http://www.etfconnect.com/select/fundPages/global.asp?MFID=3668

[Stas1976]

It looks very attractive. Only I didn't understand if it owns bonds nominated in US dollars or in the foreign currency. Sovereign government obligation rate is 92%. Probably it means that all securities are in the local currency.
Still it is intresting to know the distribution between the currencies and what is the current inflation rates in these countries to make a conclusion.

[David Briggs]

Yes, inflation is so critically important in this kind of investment. The greatest slice of the portfolio is Australian government debt. How is Australian inflation compared to the USA? Based on the data I have seen, the Australian government is a lot more disciplined and frugal than the United States government. But FAX's portfolio seems to transcend Australia in very Pacific Rim kind of way. That is where the bull in me says Here Is A Play.

[Stas1976]

Yes, inflation is so critically important in this kind of investment. The greatest slice of the portfolio is Australian government debt. How is Australian inflation compared to the USA? Based on the data I have seen, the Australian government is a lot more disciplined and frugal than the United States government. But FAX's portfolio seems to transcend Australia in very Pacific Rim kind of way. That is where the bull in me says Here Is A Play.
As of May 31, 2006, the portfolio was invested as follows:

Currency Exposure Geographic Exposure
% %
Australia 40.8 43.8
Canada - 0.4
New Zealand 0.1 0.3

United States 29.1* 7.4
Euro 1.2 3.5
Switzerland - 3.0

South Korea 12.6 11.4
Philippines 0.8 8.4
Malaysia 3.9 4.9
Singapore 5.3 4.4
Thailand 2.6 4.1
Hong Kong - 3.6
Indonesia 1.6 2.1
China - 1.0
Japan 1.0 0.7
India - 0.6
Taiwan 1.0 0.4

* Of which 27.9% is invested in US$ denominated bonds issued by foreign
issuers.