Good articles..Very Informative

http://www.globeinvestor.com/servlet/story/RTGAM.20071003.wgreenspan1003/GIStory/

Odds of U.S. recession a third to half: Greenspan
Reuters


Wednesday, October 03, 2007

LISBON — The odds of a recession in the United States are between one-third and one-half due to the credit crisis sparked by problems in the U.S. subprime mortgage sector, former U.S. Federal Reserve chief Alan Greenspan said on Wednesday.

“I think the odds of a recession in the U.S. is somewhere between a third and a half,” Mr. Greenspan said at a conference in Lisbon. “The most likely scenario is a slowing down of economic growth in the U.S.”

Mr. Greenspan said last week that he saw the chances of a recession in the United States at less than 50/50.

Mr. Greenspan said the credit crisis is beginning to dissipate in spite of large losses reported by leading banks this week.

“We are beginning to see the frenzy calm down,” he said. “Unless we get secondary effects, the worst is over.”

Among risks that could worsen a U.S. downturn are the wider consequences of large declines in house prices, he said.

Asked about foreign exchange markets, Mr. Greenspan replied it is extremely difficult to predict what would happen to the dollar and euro in the next 18 months, adding that the dollar's decline was driven by interest rate differentials.

“We have very little capability to project exchange rates over the next 18 months,” he said.

Questioned about the possibility of central bank intervention to change exchange rates in the currency market, he replied: “[The market is] very large and I am not sure that a central bank or a group of central banks have the resources.”

The euro hit $1.4281 (U.S.) on Monday, the highest level since the euro was launched in January, 1999. In the last year the euro has risen by more than 10 per cent against the dollar and European officials are beginning to voice concern about the dollar's decline.

Mr. Greenspan said the world now had two currencies that were international stores of value – the dollar and the euro.

“There is no fear that one will fade,” he said, adding that there is room for more than one major currency.

Mr. Greenspan said that equity markets had begun to anticipate the end of the credit crisis, when asked about the apparent contradiction of U.S. stocks reaching record highs this week at the same time that large banks reported big losses.

“Equity markets are forecasting what will happen in the credit markets. Rightly or wrongly,” he said. “It's what stock markets do, they anticipate, sometimes they're right, sometimes wrong.”

“The question is, is the equity market right?”

Thanks for the info investpro. so do you think EXI.UN is a good buy. is this a good time to buy.

Cheers
rsk

Hi rsk12,

I am more into long term basket investments such as mutual funds. I as a matter of fact discuss with a stock broker before going ahead with picking stocks. I at the moment hold only 2 scrips (BSE lingo) , RIM and Potash, which in the last year or so have given good returns.
EXI.UN according to my broker is still a wait and watch but holds huge promise. I have not indulged in any way.

If you want advice on their mutual funds, all 3 are still good buys though do not expect doublings in 2-3 years as in the past. China in the last year or so has almost doubled, which if taken as an absolute value is good but against the index has underperformed.
Even Excel India fund, though it has more than doubled in the last 3 years, it has underperformed the BSE (more than tripled in last 3 years!)

The CEO and president of Excel Funds creates history by being the first Toronto-based entrepreneur of Indian origin to open the TSX!


Excel India Trust opens TSX!

In a first for a Toronto-based entrepreneur of South Asian descent, Mr. Bhim Asdhir, President, CEO and founder of Excel Funds Management Inc. rang the electronic bell and opened the Toronto Stock Exchange (TSX) on a bright and glorious sunny morning on September 28, 2007 and created history.
Bhim did his early studies both in India and Canada, showing his prowess in numbers and analytical thinking by winning the top student award in mathematics in grade 13. In university he won the Descartes award for excellence in mathematics, following which he acquired a double degree in actuarial science and computer studies.
After several years working with and establishing insurance companies, the visionary Bhim finally started his own company Excel Funds, a company dealing in mutual funds investing in enterprising and bold companies of India, long before the West took an interest in the country. The first years were heady wherein the Excel India fund even gave returns of 200% in a particular year! Then came the global downturn and with it extremely tough times for the company. However, true to his name (Bhim the Pandava, renowned for his strength and towering stature), and, as he puts it, with ‘fire’ in his guts, this Pandava stuck it out, conquered all in his path and came out on top. A few years later he added a fund that invests in China to his stable. Today his company boasts of the only India-centric mutual fund offered in Canada and the best performing China focussed fund, the latter having bagged the coveted Lipper Fund award this year.
In the years since he started out, Bhim’s insight into India and China have gained him the distinction of being an authority on the subject and he has appeared on CNN, BNN and Bloomberg to give his keen perception of the “awakened elephant”(India) and the “flaming dragon”(China), two economies he holds will rewrite the economic map of the world.
His latest coup has been to list Excel India Trust on the TSX. This Trust has been designed to provide investors with exposure to an actively managed portfolio consisting primarily of equity securities of Indian companies. It trades under the symbol EXI.UN.

Profit when market goes up and again when it goes down- theoretically.

http://www.globefund.com/servlet/story/GFGAM.20071001.RHEDGE01/GFStory?query=green+line+or+td+asset


Mutual Fund News

Funds eye long-short strategy
130/30 concept aims to capture alpha returns - in excess of market benchmark
SHIRLEY WON

Monday, October 1, 2007

Several Canadian money managers are now aggressively marketing an investment strategy dubbed "hedge fund light" to institutional folks.

And it won't be long before retail investors will be able to buy closed-end or mutual funds using the so-called 130/30 long-short strategy that is becoming popular in the United States, industry players say.

"I wouldn't be surprised to see one or two companies launch products in time for RRSP season," said Colin Bugler, a managing director in the prime brokerage unit at RBC Dominion Securities Inc.

The 130/30 concept, which aims to capture "alpha" or returns in excess of a market benchmark, has two elements. A manager will buy shares that he believes will go up, and this is known as "going long."

But he will also be "going short" by borrowing shares of a stock that he believes will drop, and selling them with the expectation - or hope - of buying them back after its share price falls.

The short position is limited to 30 per cent of the value of the fund. That percentage is considered a sweet spot (particularly in the U.S. market), where the strategy does not appear to incur extra risk. The proceeds from shorting are used to buy more long positions, resulting in a fund that goes 130 per cent long and 30 per cent short.

Connor Clark & Lunn Investment Management Ltd., TD Asset Management and Hillsdale Investment Management Inc. are among the Canadian players who have plowed their own cash this year into starting institutional funds using this hybrid strategy. And they are trying to convince clients to climb aboard.

"Allowing for a small amount of shorting opens up the opportunity tremendously," said Martin Gerber, head of the quantitative equity team at Connor Clark & Lunn. "When a stock is not a good buy, all we can do in a traditional portfolio is not buy it."

There has been a "tremendous shift" to the 130/30 strategy, with estimates ranging between $50-billion and $60-billion (U.S.) for assets run this way globally, Mr. Gerber said.

Observers say there is a certain skill set required for 130/30 or similar 120/20 portfolios - strategies that narrow the gap between traditional and hedge fund managers. Many players tend to be quantitative managers whose computerized stock-ranking strategies lend themselves to shorting.

"We knew it wouldn't be a big leap for us," said Kevin LeBlanc, managing director with TD Asset Management, which uses quant strategies, and also runs hedge funds. "It was really a small tweak to run 130/30 portfolios."

While the hybrid strategy has fans in the United States and Europe, it's taking time to catch on in Canada, where pension funds must change investment mandates to allow shorting.

"It's new territory for a lot of investment boards," said Jamie Colliver, a partner with Toronto-based Integra Capital Ltd.

Integra launched its $42-million (Canadian) Integra 130/30 U.S. Equity Fund last year, and it is run by Los Angeles-based Analytic Investors Inc. - pioneer of this hybrid strategy five years ago. The U.S. fund is a holding in Integra's $1.1-billion Integra Diversified Fund held by institutional investors.

In the United States, several players offer mutual funds using the 130/30 strategy. But Canadian companies still have regulatory hurdles because of restrictions on selling short.

"You can short up to 10 per cent [of a mutual fund] if you get some exemptions," Mr. Gerber said. "But I think the regulatory framework is likely to change over time."

Publicly traded closed-end investment funds do not have restrictions on shorting. That's why Brompton Funds Management Ltd. of Toronto filed a preliminary prospectus in the summer to launch a U.S. equity fund using the strategy.

The Brompton 130/30 Equity Fund was to be run by U.S.-based UBS Global Asset Management, and replicate its institutional fund offered in the United States. But Brompton opted in August to put its offering on hold until later this year or next year. "There was a lot of instability in the capital markets so we just decided that it wasn't the right time," said Brompton's chief executive officer Mark Caranci.

It's early days not only in Canada, but also in the United States, where 130/30 mutual funds have come on the market over the past two years.

"They haven't been around very long so it's hard to gauge how they will do in different market environments over the long haul," said Marka Norton, fund analyst with Chicago-based Morningstar Inc.

The success in any fund using the 130/30 strategy ultimately depends on the person pulling the trigger, Ms. Norton said. "A really good stock picker is hard to find."

Hi Investpro

Presently, I am investing in stocks & MFs by myself with whatever little research I do. But moving forward I would like to consult a broker on a permanant basis may be even have some one manage my account as my present company has put restriction on my trading. I was wondering if you could suggest some broker/trader who would be able to help. Can you also tell me how much does it cost to have a broker advise you.

Cheers
rsk