You may have seen that WisdomTree launched its first batch of currency ETFs today.

Chinese Yuan (CYB)
Indian Rupee (ICN)
Brazilian Real (BZF)
Euro (EU)
Japanese Yen (JYF)

The yen was included in the press release emailed to me but I think Bruce Lavine said on CNBC that it was not coming today and the JYF ticker does not seem to work.

Personally I am excited about these, especially the yuan and the real but as I usually say in my TSCM articles, give these time to show that they can do what they are supposed to.

The chart above is of the Chinese yuan (charted backwards to make it apples to apples) against the Market Vectors Chinese Yuan ETN (CYN) since the ETN’s inception. In that time the yuan is up a little over 1% which is a decent move for two months for a currency but the ETN is down 2%.

I might be missing something but according to the Van Eck site CYN should track the S&P Chinese Renminbi Index less the fee. In the year ending March 31 this index was up 8.68%. The actual exchange rate in that time saw the yuan rise 10%, a 1.32% lag for the index. The market for yuan is complicated and that sort of variance is not shocking. But in just two months the variance between the fund and the actual exchange rate has been more than 3% and to look at the chart the correlation looks like it is negative.

I don’t know if this will fix itself or not but it has given a bad first impression so I say if you have any interest in the WisdomTree products, and to be clear I do, I would say to give them a little time.

Last 5 posts by Roger Nusbaum

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