Templeton Russia Fund

[Groty]

Ticker is TRF. It's a play on the Russian stock market and its holdings include the largest Russian companies, including Gazprom and Lukoil, among others. TRF increased about 60% during 2006.

IMO, since the Russian economy grew less than 10% and the excitement about Russia becoming a member of the WTO is way overdone, I think investors have pushed the Russian market up too far too fast. I'm almost certainly going to short TRF at the first sign of a trend change.

Anyway, while snooping around on www.etfconnect.com, I see TRF last traded at a ginormous 38% premium to NAV. My initial instict was that the huge premium makes it an even more attractive short. However, its history shows TRF has always traded at a big premium to NAV (although the current 38% is at the high end). I looked at a handful of other country specific ETFs and saw most traded closer to a 1% discount/premium to NAV.

The question is does anybody have any insight into why TRF trades at such a huge premium to NAV?

SECOND TRADE IDEA:

Many tecnhicians and Dow Theorists have gotten their panties in a bunch recently because the Dow Industrials have continued to move higher while the Dow Transport Index has sold off (especially during December). The correlation between the DJIA and DJTA had been fairly tight until December, when it really broke down with the sell off in the Transports. Dow Theorists say either the DJIA will follow the transports lower, or the Transports will reverse course and go higher. In other words, the current divergence between the two indexes is an abberation and both will be going in the same direction eventually. I'm going to put on a dollar neutral spread trade, going short the DIA and long the IYT (ETF for the DJTA). I make money has long as the current divergence between the two indexes reverses course. Any comments on this trade?

[Stoli7]

[ QUOTE ]
Speaking following a cabinet session, Vladimir Putin said: "Economic growth hit 6.9% on 6.4% last year (2006). We are keeping to schedule in our long-term plans."

[/ QUOTE ]

Compared to China which growth hit around 10% it's not that bad. Russian stock exchange index grew 65% in dollars, but the dollar have weaken remarkably against the ruble. I still believe the Russian stock market has a lot more to give. So my investments will not move from Russia but I will rather increase my investments over there.

[kimchi]

I think spread trading is pretty low-risk, provided you've done your homework and use proper money management throughout the duration of the trade.

But, I'm sure you know this.