Reksadana

Reksadana adalah wadah dan pola pengelolaan dana/modal bagi sekumpulan investor untuk berinvestasi dalam instrumen-instrumen investasi yang tersedia di Pasar dengan cara membeli unit penyertaan reksadana. Dana ini kemudian dikelola oleh Manajer Investasi (MI) ke dalam portofolio investasi, baik berupa saham, obligasi, pasar uang ataupun efek/sekuriti lainnya.

Menurut Undang-undang Pasar Modal nomor 8 Tahun 1995 pasal 1, ayat (27): “Reksadana adalah wadah yang dipergunakan untuk menghimpun dana dari masyarakat Pemodal untuk selanjutnya diinvestasikan dalam portofolio Efek oleh Manajer Investasi.”

Dari kedua definisi di atas, terdapat tiga unsur penting dalam pengertian Reksadana yaitu:

1. Adanya kumpulan dana masyarakat, baik individu maupun institusi
2. Investasi bersama dalam bentuk suatu portofolio efek yang telah terdiversifikasi; dan
3. Manajer Investasi dipercaya sebagai pengelola dana milik masyarakat investor.

Pada reksadana, manajemen investasi mengelola dana-dana yang ditempatkannya pada surat berharga dan merealisasikan keuntungan ataupun kerugian dan menerima dividen atau bunga yang dibukukannya ke dalam "Nilai Aktiva Bersih" (NAB) reksadana tersebut.

Kekayaan reksadana yang dikelola oleh manajer investasi tersebut wajib untuk disimpan pada bank kustodian yang tidak terafiliasi dengan manajer investasi, dimana bank kustodian inilah yang akan bertindak sebagai tempat penitipan kolektif dan administratur.

Daftar isi [sembunyikan] 1 Sejarah Reksadana 2 Bentuk Hukum Reksadana 3 Karakteristik Reksadana 4 Jenis-jenis Reksadana 5 Nilai Aktiva Bersih 6 Manfaat Reksadana 7 Risiko Investasi Reksa Dana 8 Exchange Traded Fund 9 Pranala luar 10 Lihat pula 11 Catatan Kaki

Sejarah Reksadana

Reksadana yang pertama kali bernama Massachusetts Investors Trust yang diterbitkan tanggal 21 Maret 1924, yang hanya dalam waktu setahun telah memiliki sebanyak 200 investor reksadana dengan total aset senilai US$ 392.000.

Pada tahun 1929 sewaktu bursa saham jatuh maka pertumbuhan industri reksadana ini menjadi melambat. Menanggapi jatuhnya bursa maka Kongres Amerika mengeluarkan Undang-undang Surat Berharga 1933 (Securities Act of 1933) dan Undang-undang Bursa Saham 1934 (Securities Exchange Act of 1934).

Berdasarkan peraturan tersebut maka reksadana wajib didaftarkan pada Securities and Exchange Commission atau biasa disebut SEC yaitu sebuah komisi di Amerika yang menangani perdagangan surat berharga dan pasar modal. Selain itu pula, penerbit reksadana wajib untuk menyediakan prospektus yang memuat informasi guna keterbukaan informasi reksadana, juga termasuk surat berharga yang menjadi objek kelolaan, informasi mengenai manajer investasi yang menerbitkan reksadana.

SEC juga terlibat dalam perancangan Undang-undang Perusahaan Investasi tahun 1940 yang menjadi acuan bagi ketentuan-ketentuan yang wajib dipenuhi untuk setiap pendaftaran reksadana hingga hari ini.

Dengan pulihnya kepercayaan pasar terhadap bursa saham, reksadana mulai tumbuh dan berkembang. Hingga akhir tahun 1960 diperkirakan telah ada sekitar 270 reksadana dengan dana kelolaan sebesar 48 triliun US Dollar.

Reksadana indeks pertama kali diperkenalkan pada tahun 1976 oleh John Bogle dengan nama First Index Investment Trust, yang sekarang bernama Vanguard 500 Index Fund yang merupakan reksadana dengan dana kelolaan terbesar yang mencapai 100 triliun US Dollar

Salah satu kontributor terbesar dari pertumbuhan reksadana di Amerika yaitu dengan adanya ketentuan mengenai rekening pensiun perorangan (individual retirement account - IRA) ^[1], yang menambahkan ketentuan kedalam Internal Revenue Code( peraturan perpajakan di Amerika) yang mengizinkan perorangan (termasuk mereka yang sudah memiliki program pensiun perusahaan) untuk menyisihkan sebesar 4.000 US $ setahun.

Bentuk Hukum Reksadana

Berdasarkan Undang-undang Pasar Modal Nomor 8 Tahun 1995 pasal 18, ayat (1), bentuk hukum Reksadana di Indonesia ada dua, yakni Reksadana berbentuk Perseroan Terbatas (PT. Reksa Dana) dan Reksadana berbentuk Kontrak Investasi Kolektif (KIK).

Reksa Dana berbentuk Perseroan (PT. Reksa Dana)

suatu perusahaan (perseroan terbatas), yang dari sisi bentuk hukum tidak berbeda dengan perusahaan lainnya. Perbedaan terletak pada jenis usaha, yaitu jenis usaha pengelolaan portofolio investasi.

Kontrak Investasi Kolektif

kontrak yang dibuat antara Manajer Investasi dan Bank Kustodian yang juga mengikat pemegang Unit Penyertaan sebagai Investor. Melalui kontrak ini Manajer Investasi diberi wewenang untuk mengelola portofolio efek dan Bank Kustodian diberi wewenang untuk melaksanakan penitipan dan administrasi investasi.

Karakteristik Reksadana

Berdasarkan karakteristiknya maka reksadana dapat digolongkan sebagai berikut:

Reksadana Terbuka

adalah reksadana yang dapat dijual kembali kepada Perusahaan Manajemen Investasi yang menerbitkannya tanpa melalui mekanisme perdagangan di Bursa efek. Harga jualnya biasanya sama dengan Nilai Aktiva Bersihnya. Sebagian besar reksadana yang ada saat ini adalah merupakan reksadana terbuka.

Reksadana Tertutup

adalah reksadana yang tidak dapat dijual kembali kepada perusahaan manajemen investasi yang menerbitkannya. Unit penyertaan reksadana tertutup hanya dapat dijual kembali kepada investor lain melalui mekanisme perdagangan di Bursa Efek. Harga jualnya bisa diatas atau dibawah Nilai Aktiva Bersihnya.

Jenis-jenis Reksadana

1. Reksadana Pendapatan Tetap.

   Reksadana yang melakukan investasi sekurang-kurangnya 80% dari dana yang dikelola (aktivanya) dalam bentuk efek bersifat utang.

2. Reksadana Saham.

   Reksadana yang melakukan investasi sekurang-kurangnya 80% dari dana yang dikelolanya dalam efek bersifat ekuitas.

3. Reksadana Campuran.

   Reksadana yang mempunyai perbandingan target aset alokasi pada efek saham dan pendapatan tetap yang tidak dapat dikategorikan ke dalam ketiga reksadana lainnya.

4. Reksadana Pasar Uang.

   Reksadana yang investasinya ditanam pada efek bersifat hutang dengan jatuh tempo yang kurang dari satu tahun.

Nilai Aktiva Bersih

NAB (Nilai Aktiva Bersih) merupakan salah satu tolok ukur dalam memantau hasil dari suatu Reksa Dana.NAB per saham/unit penyertaan adalah harga wajar dari portofolio suatu Reksadana setelah dikurangi biaya operasional kemudian dibagi jumlah saham/unit penyertaan yang telah beredar (dimiliki investor) pada saat tersebut.

Manfaat Reksadana

Reksa Dana memiliki beberapa manfaat yang menjadikannya sebagai salah satu alternatif investasi yang menarik antara lain:

1. Dikelola oleh manajemen profesional

   Pengelolaan portofolio suatu Reksa Dana dilaksanakan oleh Manajer Investasi yang memang mengkhususkan keahliannya dalam hal pengelolaan dana. Peran Manajer Investasi sangat penting mengingat Pemodal individu pada umumnya mempunyai keterbatasan waktu, sehingga tidak dapat melakukan riset secara langsung dalam menganalisa harga efek serta mengakses informasi ke pasar modal.

2. Diversifikasi investasi

   Diversifikasi atau penyebaran investasi yang terwujud dalam portofolio akan mengurangi risiko (tetapi tidak dapat menghilangkan), karena dana atau kekayaan Reksa Dana diinvestasikan pada berbagai jenis efek sehingga risikonya pun juga tersebar. Dengan kata lain, risikonya tidak sebesar risiko bila seorang membeli satu atau dua jenis saham atau efek secara individu.

3. Transparansi informasi

   Reksa Dana wajib memberikan informasi atas perkembangan portofolionya dan biayanya secara kontinyu sehingga pemegang Unit Penyertaan dapat memantau keuntungannya, biaya, dan risiko setiap saat.Pengelola Reksa Dana wajib mengumumkan Nilai Aktiva Bersih (NAB) nya setiap hari di surat kabar serta menerbitkan laporan keuangan tengah tahunan dan tahunan serta prospektus secara teratur sehingga Investor dapat memonitor perkembangan investasinya secara rutin.

4. Likuiditas yang tinggi

   Agar investasi yang dilakukan berhasil, setiap instrumen investasi harus mempunyai tingkat likuiditas yang cukup tinggi. Dengan demikian, Pemodal dapat mencairkan kembali Unit Penyertaannya setiap saat sesuai ketetapan yang dibuat masing-masing Reksadana sehingga memudahkan investor mengelola kasnya. Reksadana terbuka wajib membeli kembali Unit Penyertaannya sehinga sifatnya sangat likuid.

5. Biaya Rendah

   Karena reksadana merupakan kumpulan dana dari banyak pemodal dan kemudian dikelola secara profesional, maka sejalan dengan besarnya kemampuan untuk melakukan investasi tersebut akan menghasilkan pula efisiensi biaya transaksi.

Biaya transaksi akan menjadi lebih rendah dibandingkan apabila Investor individu melakukan transaksi sendiri di bursa.

Risiko Investasi Reksa Dana

Untuk melakukan investasi Reksa Dana, Investor harus mengenal jenis risiko yang berpotensi timbul apabila membeli Reksadana.

1. Risiko menurunnya NAB (Nilai Aktiva Bersih) Unit Penyertaan

   Penurunan ini disebabkan oleh harga pasar dari instrumen investasi yang dimasukkan dalam portofolio Reksadana tersebut mengalami penurunan dibandingkan dari harga pembelian awal. Penyebab penurunan harga pasar portofolio investasi Reksadana bisa disebabkan oleh banyak hal, di antaranya akibat kinerja bursa saham yang memburuk, terjadinya kinerja emiten yang memburuk, situasi politik dan ekonomi yang tidak menentu, dan masih banyak penyebab fundamental lainnya.

2. Risiko Likuiditas

   Potensi risiko likuiditas ini bisa saja terjadi apabila pemegang Unit Penyertaan reksadana pada salah satu Manajer Investasi tertentu ternyata melakukan penarikkan dana dalam jumlah yang besar pada hari dan waktu yang sama. Istilahnya, Manajer Investasi tersebut mengalami rush (penarikan dana secara besar-besaran) atas Unit Penyertaan reksadana. Hal ini dapat terjadi apabila ada faktor negatif yang luar biasa sehingga mempengaruhi investor reksadana untuk melakukan penjualan kembali Unit Penyertaan reksadana tersebut. Faktor luar biasa tersebut di antaranya berupa situasi politik dan ekonomi yang memburuk, terjadinya penutupan atau kebangkrutan beberapa emiten publik yang saham atau obligasinya menjadi portofolio Reksadana tersebut, serta dilikuidasinya perusahaan Manajer Investasi sebagai pengelola Reksadana tersebut.

3. Risiko Pasar

   Risiko Pasar adalah situasi ketika harga instrumen investasi mengalami penurunan yang disebabkan oleh menurunnya kinerja pasar saham atau pasar obligasi secara drastis. Istilah lainnya adalah pasar sedang mengalami kondisi bearish, yaitu harga-harga saham atau instrumen investasi lainnya mengalami penurunan harga yang sangat drastis. Risiko pasar yang terjadi secara tidak langsung akan mengakibatkan NAB (Nilai Aktiva Bersih) yang ada pada Unit Penyertaan Reksadana akan mengalami penurunan juga. Oleh karena itu, apabila ingin membeli jenis Reksadana tertentu, Investor harus bisa memperhatikan tren pasar dari instrumen portofolio Reksadana itu sendiri.

4. Risiko Default

   Risiko Default terjadi jika pihak Manajer Investasi tersebut membeli obligasi milik emiten yang mengalami kesulitan keuangan padahal sebelumnya kinerja keuangan perusahaan tersebut masih baik-baik saja sehingga pihak emiten tersebut terpaksa tidak membayar kewajibannya. Risiko ini hendaknya dihindari dengan cara memilih Manajer Investasi yang menerapkan strategi pembelian portofolio investasi secara ketat.

Exchange Traded Fund

Exchange traded fund (ETF) ^[2] adalah sebuah reksadana yang merupakan suatu inovasi dalam dunia industri reksadana yang sifatnya mirip dengan suatu perusahaan terbuka dimana unit penyertaannya dapat diperdagangkan di bursa.

ETF ini adalah merupakan kombinasi dari reksadana tertutup dan reksadana terbuka, dan ETF ini biasanya adalah merupakan reksadana yang mengacu kepada indeks saham.

ETF ini lebih efisien daripada reksadana konvensional seperti yang kita kenal saat ini, dimana reksadana senantiasa menerbitkan unit penyertaan baru setiap harinya dan membeli kembali yang dijual oleh pemegang unit (manajer investasi harus menjual surat berharga yang merupakan aset reksadana tersebut untuk memenuhi kewajibannya membeli unit penyertaan yang dijual, sedangkan unit penyertaan ETF diperdagangkan langsung di bursa setiap hari (menyerupai reksadana tertutup, dimana tidak ada dapat dijual kembali kepada manajer investasi)

Di Indonesia, ETF ini disebut "Reksadana berbentuk kontrak investasi kolektif yang unit penyertaannya diperdagangkan di bursa efek", dan pada hari senin tanggal 4 Desember 2006, Badan Pengawas Pasar Modal (Bapepam) telah menerbitkan suatu aturan baru yaitu peraturan nomor IV.B.3 tentang "Reksadana berbentuk kontrak investasi kolektif yang unit penyertaannya diperdagangkan di Bursa Efek". ^[3]

Balance of Trade in April Recorded Surplus Foreign Exchange Reserves as of May Reached US$57.9 Billion
	02-JUN-09
	JAKARTA: Indonesia's balance of trade in April 2009 recorded a surplus of US$2.08 billion, better than a deficit of US$250 million in April 2008. Head of the Central Statistics Agency (BPS) Rusman Heriawan revealed the surplus in April was attributable to a sharp decline in import value compared to a decline in export value. The trade surplus in the first four months of this year even reached US$6.01 billion as Indonesia from January to April 2009 recorded US$31.49 billion in export value and US$25.48 billion in import value. "There was a surplus as import fell deeper than export. This signals that the amount of foreign exchange reserves in Indonesia's balance of payment will increase," he explained yesterday. Rusman informed Indonesia's export value in April indeed dropped 1.81% from March to US$8.46 billion. The export value also fell 22.5% from that in April 2008. The declining export value in April was attributable to a decrease of 1.74% in non-oil and gas export value from US$7.33 billion to US$7.21 billion. In the meantime, oil and gas export value also slid 2.21% from US$1.281 billion to US$1.253 billion. Cumulatively, Indonesia's export value from January to April 2009 reached US$31.49 billion, down 29.51% from that in the same period in 2008, while non-oil and gas export value plunged 22.68% to US$26.90 billion. "In the first four months of 2009, non-oil and gas export declined lower than export in general. This means that our oil and gas export fell sharper than non-oil and gas export due to low global crude oil price during the period." Start recover Separately, Minister of Finance Sri Mulyani Indrawati revealed the amount of foreign exchange reserves as of May 2009 had showed signs of recovery since October 2008. "The amount of foreign exchange reserves dropped the sharpest to around US$50 billion in July 2008. The amount has now started recover at around US$57.9 billion," she informed at a meeting with the House's Budget Committee yesterday. According to him, market confidence in the national economy over the past five months had started recovering following signs of global economic recovery. "Two indicators, namely the stock price index and the rupiah exchange rate, have been steadily improving over the past five months," she explained. The amount of capital inflow, she added, had also started recovering in March and April 2009. BPS recorded regional exports in the first four months of the year declined equally. Indonesia's non-oil and gas export value to Asean, Japan, the US, the European Union, and China, dropped by 28.3%, 28.9%, 22.8%, 20.4%, and 21.3%, respectively. (Bisnis/aca/dea/16)

Prabowo: Saya tak pernah main di pasar modal

JAKARTA (bisnis.com): Calon wakil presiden Prabowo Subianto yang akan mendampingi Megawati Soekarnoputri menilai pasar modal sudah berjalan relatif baik dan belum terjadi gejolak yang mengkhawatirkan sehingga tak perlu dilakukan strategi khusus dalam pengembangannya.

Dalam kunjungannya di redaksi bisnis.com sore ini, Prabowo mengatakan bahwa hanya sebagian kecil orang yang berinvestasi di pasar modal. "Saya sendiri tak pernah main saham, jadi kalau sudah berjalan tak usah diatur-atur. Yang penting adalah perlindungan hukum terhadap investor kecil," katanya.

Menurut Prabowo, yang terpenting dalam industri pasar modal adalah transparansi dalam pengelolaannya, aturan yang tegas dan perlindungan terhadap investor lokal. "Jangan sampai investor lokal yang jadi korban," tegasnya.

Prabowo menjelaskan yang lebih pentinga dalah pembangunan di sektor ril yang merupakan implementasi dari melaksanakan ekonomi kerakyatan. Dia mentargetkan akan mencetak 2 juta hektare lahan baru untuk meningkatkan produksi beras, jagung, kedelai, dan tebu yang dapat mempekerjakan 12 juta orang.

Selain itu, dia juga akan mencetak 4 juta hektare lahan aren sebagai bahan baku bio-ethanol yang dapatmempekerjakan 24 juta orang.

Sektor riil yang melibatkan masyarakat luas, lebih penting dari pada pengembangan pasar modal. Jadi, katanya, pasar modal sudah berjalan seperti layaknya saat ini sehingga tak perlu diintervensi lagi. (ln)

s Human Fat The Ultimate Bio-Diesel Fuel?

Posted by: Bruce Nussbaum on May 13

One of my most popular posts is on the Earthrace bio-boat fueled by human fat. I want to return to that conversation because it is important—even if it is yucky.

I need someone to do the math— 30% of all Americans are obese. A significant percentage of Chinese are now obese. Lots of Europeans are obese. And many of the rest of us are just chubby—10 to 20 pounds overweight. Just how many pounds of fat are available to us annually to make bio-fuel? What about pricing?

Let’s take this seriously and think about a sustainable, organic cycle that actually takes advantage of the fact that we eat too much, we eat too much meat, and we are, well, too many “we’s” on the planet (this biomass instead of people). So instead of complaining about all that biomass, why not use it for energy. Plug an energy use factor into our current culture of fatness.

If we can power a trimaran around the world on human fat, can’t we use our portly bodies to get our portly bodies around cities?

From Russia With Love: Facebook Lands $200 Million

The social networking site will tap Digital Sky Technologies for expansion funds in a deal valuing Facebook at $10 billion. Still no public issue

By Spencer E. Ante

Ending months of fevered speculation over whether it would raise more money, social network Facebook said on May 26 that it will take a $200 million investment from Russia's Digital Sky Technologies.

In return, DST is getting preferred stock worth 1.96% of Facebook, valuing the social network at $10 billion. This is the first time Facebook has raised major equity funding since late 2007, when Microsoft (MSFT) invested $240 million in exchange for a 1.6% stake that valued the site at $15 billion.

In a move that will help Facebook employees unlock some of the value of their shares before the company goes public or is sold, DST will purchase at least $100 million of Facebook common stock from current or former Facebook employees. DST co-founder Yuri Milner tells BusinessWeek that the agreement to buy common stock was not a precondition of the equity investment. "These are two separate transactions," Milner says in an interview. DST and Facebook say they will release details of the plan this summer.

Zuckerberg: No shift in strategy

Facebook considers the investment a "good buffer" and will use it for expansion, rather than to fund existing operations, CEO Mark Zuckerberg says in an interview. "It might come in handy if we want to expand," Zuckerberg says. "We felt the valuation was good. Having additional money will allow us to explore new things, such as building data centers or acquiring companies." Sales are rising, and the company has no concrete plans to spend the cash, he adds. Facebook Chief Operating Officer Sheryl Sandberg said as recently as April that the company did not need additional financing.

Over the past year, while most companies have grown cautious and cut back on expansion, the social networking Web site has pressed ahead with aggressive growth plans. However, Zuckerberg says, the investment does not portend a strategic change. "This doesn't signal any shift in strategy," he says.

Zuckerberg also reiterated that Facebook has no plans to sell shares to the public soon. "For a lot of start-ups, you get the feeling that the IPO is really the end goal," he says. "That's really not the case for us. We view that as one milestone along the way. We don't see it happening in the immediate horizon. It's not something we're rushing toward. We'll do it when it's the right thing for the company."

DST: dozens of Web investments

On a conference call following the announcement, Zuckerberg also reiterated the company's forecast for sales to rise 70% this year. Some analysts remain skeptical that the company can achieve such growth during a recession. For instance, eMarketer speculates that Facebook's main source of revenue—global advertising—will increase 20%, to $300 million, from $250 million. "Where is that [70%] going to come from?" says Debra Aho Williamson, eMarketer senior analyst. "I can't see it coming solely from advertising. Either he has some new revenue stream up his sleeve or he is crazy."

On the call, Zuckerberg said Facebook was drawn by DST's expertise in developing business models that help social networks make money. Based in London and Moscow, DST is a four-year-old investment group. According to its Web site, DST has raised and invested more than $1 billion in over 30 companies, including Russian Web portal Mail.ru, Russian social network Vkontakte.ru, and Forticom Group, which owns and operates other social networks in Russia and Eastern Europe.

While other private investors have offered to buy Facebook shares for valuations in the range of $4 billion to $6 billion, DST co-founder Yuri Milner expressed confidence in the company's ability to make money on its Facebook stake. Although Facebook and other U.S.-based social networks have had a hard time making money from their growing number of users, Milner said the social networks he has invested in are making much more money per user than Facebook is now. Milner said Facebook would be able to generate more money from advertising and forms of e-commerce, such as micropayments for virtual gifts given to a person's friends. "We see monetization patterns that will be very applicable to Facebook going forward," he said. "For us it was almost a no-brainer."

A Soviet at Wharton in 1990

Milner says he does not need to use only traditional metrics, such as price-to-earnings multiples, in valuing his Internet investments. "That's not how we look at it," said Milner. "We see things that others don't see."

Milner, who received part of his education in America, founded DST in 2005 along with fellow Russian businessman Gregory Finger. A 1990 article in the Daily Pennsylvanian, the newspaper of the University of Pennsylvania, said Milner was "the first Soviet citizen ever to study at Wharton," Penn's prestigious business school.

In the story, Milner said his goal was to return with his degree to the Soviet Union to take advantage of the developing free markets and serve as a bridge between his native country and the West. "My idea is to be in the most useful place in the proper time," Milner said.

Almost two decades later, Milner is hoping he has found that place in Facebook.

Which Is Better—Biofuels or Bioelectricity?

In the quest for alternative fuels, biofuels and bioelectricity are two of the leading solutions—but one is better for your car and the planet

By Darren Quick

Running vehicles on biofuels such as ethanol reduces CO2 emissions and offers a way to lessen the world's reliance on oil. While this sounds great from an environmental perspective, the energy required to produce the biofuel and the land clearing for crops that can result means biofuels aren't necessarily the environmentally friendly solution they initially appear to be. Recognizing this, researchers have analyzed the best way to maximize the "miles per acre" from biomass and discovered that the far more efficient option is to convert the biomass to electricity, rather than ethanol. Another tick for the electric car.

Writing in a recent online edition of Science, the researchers calculate that, compared to ethanol used for internal combustion engines, bioelectricity used for battery-powered vehicles would deliver an average of 80% more miles of transportation per acre of crops, while also providing double the greenhouse gas offsets to mitigate climate change.

The researchers performed a life-cycle analysis of both bioelectricity and ethanol technologies, taking into account not only the energy produced by each technology, but also the energy consumed in producing the vehicles and fuels.

Bioelectricity was the clear winner in the transportation-miles-per-acre comparison, regardless of whether the energy was produced from corn or from switchgrass, a cellulose-based energy crop. For example, a small SUV powered by bioelectricity could travel nearly 14,000 highway miles on the net energy produced from an acre of switchgrass, while a comparable internal combustion vehicle could only travel about 9,000 miles on the highway.

Bioelectricity also offers more possibilities for reducing greenhouse gas emissions through measures such as carbon capture and sequestration, which could be implemented at biomass power stations, but not individual internal combustion vehicles.

Lead author of the study, Elliott Campbell of the University of California, Merced, says, "there is a big strategic decision our country and others are making: whether to encourage development of vehicles that run on ethanol or electricity. Studies like ours could be used to ensure that the alternative energy pathways we chose will provide the most transportation energy and the least climate change impacts."

Investing: Playing a Pullback in the Dollar

Some investment pros are predicting the euro will rise to $1.50 this summer. Here are funds and ETFs to consider

By David Bogoslaw

With signs of improving economic conditions worldwide, investors are once again starting to consider higher-risk vehicles such as currencies.

On May 20, the euro reached US$1.3831, its highest level vs. the greenback since January, while the British pound achieved a six-month high of $1.5760. The spark for the mini-rally: a combination of encouraging remarks by Timothy Geithner about improving credit markets and signals that Fed officials are willing to raise the mortgage and Treasury bond purchasing programs beyond the $1.75 trillion the Fed has already agreed to buy, according to Action Economics.

The 10-week rebound in equity indexes around the world has sped the dollar's retreat against the euro and other key foreign currencies. Many strategists agree that the greenback's strength peaked last year on flight-to-quality buying of Treasury notes by investors worldwide who were terrified of all other asset classes.

If the buck is set to pull back, with some pros saying the euro is heading to $1.50 over the summer, which funds or ETFs should you play?

Axel Merk, who manages the $280 million Merk Hard Currency Fund (MERKX) is bullish on the euro and bearish on the dollar, because the European Central Bank's policies are less inflationary than those of the Federal Reserve. The ECB has taken heat for being slower to cut interest rates in response to the economic crisis and its economy will be slower to recover than the U.S. economy. But at least Trichet & Co. won't have sacrificed long-term currency stability for that growth, he says.

Euro as Stability Play

"The Fed's focus is to support price stability and if it's not doing that then it's not living up to its mandate," he says. "Price stability is the key ingredient to get long-term growth. The Fed is fudging that concept these days. In the best-case scenario, we'll get inflation growth in the U.S."

And instead of encouraging private-sector investment, the Fed's programs are substituting for it, he adds.

Contrary to popular perception, a country doesn't need economic growth to have a strong currency, he argues. It only needs to be growing its economy when it has a current account deficit, as the U.S. does. From that perspective, the worst thing that can happen to the U.S. would be a more consistent flow of positive economic news since that would revive inflation fears, which will reduce demand by foreign investors for U.S. Treasuries, causing the dollar to sink further. That would also raise the cost of credit for U.S. businesses and consumers and push the economy back into recession, he says.

The Merk Hard Currency Fund currently has 49.4% of its exposure to the currencies of Western Europe, with a 23.7% weight in the euro specifically. The fund doesn't own any British pounds or Swedish krona at the moment. The fund was down 0.8% year-to-date as of Apr. 30.

For Merk, the euro is a stability play, while the so-called commodity currencies in markets like Brazil and Australia are reflation plays. All the money being printed by the central banks of the Group of 10 industrialized nations will ultimately be used to buy commodities such as oil and metals, which offsets the higher volatility in those currencies, he says.

Dollar: Short-Term Weakness

Meg Browne, senior currency strategist at Brown Brothers Harriman, is pegging her expectations for the dollar's long-term strength on the difference in economic growth between the U.S. and other regions such as the euro zone. But in the shorter term she believes the greenback will stay weak as investors continue to anticipate economic recovery.

She doesn't share Merk's concerns about Treasuries when a more sustained economic recovery comes since she thinks people will shift back into stocks slowly. In the meantime, the Fed will have made progress unwinding some of the debt positions it took on as part of its liquidity programs, she says.

Adam Boyton, G-10 foreign exchange strategist at Deutsche Bank (DB), thinks that over the next two to four years, currency movements will cease to be determined by just one factor such as relative economic growth. Instead, they will be influenced by a number of factors, including interest rate differentials, risk assessments, and current account deficits.

If equity markets continue to normalize, Boyton says he expects to see a much lower correlation between equities and currencies by midsummer. He and others predict the euro will top out at around $1.50 by the end of the summer before returning to a trading range between $1.30 and $1.50 for the rest of this year.

If you're bullish on the euro, the CurrencyShares Euro Trust (FXE) offers good exposure. With a net asset value of $589.8 million, the ETF's total return is -1.89% year-to-date as of May 20.

For a High Yield, Emerging Markets

Currency plays tend to be "an iffy proposition for ordinary investors just because predicting the direction of currencies is very difficult to do," says Gregg Wolper, a senior mutual fund analyst at Morningstar (MORN). "Even the experts get tripped up time and time again on their expectations of where currencies are going."

One way to avoid directional bets is by investing in a currency carry trade, which entails borrowing a low-yielding currency such as the yen and selling it to fund the purchase of a much higher-yielding currency. It's not possible to do such a trade within the G-10 currencies now, since their interest rates have all been sharply reduced to spur economic growth, says Boyton at Deutsche Bank. These days, to get a high yield, you have to borrow a G-10 currency and go long on an emerging-market currency, he says.

Carry trades are generally the province of institutional investors who are comfortable using more sophisticated instruments in their portfolios. There are two ETFs, however, that give retail investors access to a replicated carry trade—the PowerShares G10 Currency Harvest (DVB), which goes long on the three currencies with the highest yields and short on the three with the lowest yields.

When you invest in this ETF, you're essentially using two-times leverage since 100% of the fund's net asset value goes into both the long positions and the short ones, says Bradley Kay, an ETF analyst at Morningstar. He confirms, though, that the only place currently to find yields of any real size is in emerging markets.

Doubts About the Dollar's Status

The second carry trade vehicle is actually an exchange-traded note, or ETN, offered by Barclays (BCS)—the iPath Optimized Currency Carry (ICI). Some people are wary of ETNs because they are debt instruments that bear the credit risk of the sponsor, in this case Barclays Bank. But this ETN trades at a much smaller discount than usual since shares can be redeemed at any time instead of having to be held to maturity in 2038, says Kay.

Another distinctive feature of the iPath notes: The sizes of their long and short positions are changed periodically according to the volatility of each of the underlying currencies.

Over the longer term, there are doubts about the dollar's ability to withstand challenges to its status as the world's sole reserve currency. Those concerns gained some traction this week with the signing of 13 bilateral trade agreements between China and Brazil, with the goal of eventually being able to settle trades in their own currencies instead of the dollar.

"Contrary to speculation that circulated, there was no agreement of the invoicing currency for bilateral trade," Marc Chandler, a currency strategist at Brown Brothers Harriman, wrote in a note on May 19. "Talk of such an agreement was probably driven by a surge in Brazil-China bilateral [trade] in March and April, which caused it to surpass the amount of U.S.-China bilateral trade."

Decline in Influence

China has taken important steps toward a fully mature currency—creating swap lines with neighboring countries and developing its own derivative markets—but is "reluctant to dump a free-floating currency on its people because they don't want to cause disruptions to business," including the need to start hedging their currency risk, says Merk.

Although dumping the dollar as a reserve currency is in nobody's interest, least of all China, which holds so much U.S. government debt, most Asian countries are realizing they have been overly dependent on the U.S. market, says Merk. As they continue to develop their own markets, the dollar, at least on the margin, will decline in influence.

"That's good for the world economy but not very good for the value of the dollar vs. other currencies," he says.

Is Living in a High-End Suburb Worth It?

Even residents of upscale suburbs are asking if they wouldn't be better off living somewhere with lower taxes and cost-of-living expenses

By Prashant Gopal

Lifestyle

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The economic downturn, after ravaging poor and middle-class neighborhoods, is now hammering affluent enclaves. Even in the nation's priciest neighborhoods, homeowners are facing economic uncertainties, and some are beginning to wonder whether they're paying too much for prestige.

The cost of living in Atherton, Calif., Highland Park, Tex., or Scarsdale, N.Y., goes well beyond what it costs to purchase a home there. Mansions in high-end communities have oversize tax, maintenance, utility, and mortgage bills. And then there's the cost of keeping up with the Joneses: shopping at boutiques and gourmet stores, country club memberships, private school tuition, soccer for the kids, the gardener, the landscaper, and the nanny.

Many residents of these suburbs have "essentially taken a step back," says Kevin J. Meehan, president of Summit Wealth Advisors in Itasca, Ill. "And they are either looking at downsizing within those communities or moving to a totally different venue because of the stress they're experiencing with the cost of living in their suburbs." Empty nesters, in particular, may question why they are still living in communities with high school taxes when their children are long gone.

BusinessWeek.com, working with national real estate researcher OnBoard, chose the most expensive suburbs in each state based on cost of living, mortgage and utility payments, median home prices, and property taxes. Residents have long made financial sacrifices to live in places such as Mountain Brook, Ala., Lake Oswego, Ore., Winnetka, Ill., and other exclusive towns on our list. They're paying for a lifestyle that includes excellent public schools, low crime, gorgeous neighborhoods, and excellent parks and recreation systems.

"Buyer's Market for Luxury"

But residents are also paying a premium for the cachet that comes with having a certain Zip Code. They want to live with their peers, go to the same country clubs, and send their children to the same schools. For those who aspire for a lifestyle upgrade, there's good news. Home prices in upscale towns are falling even as mortgage rates hover near historic lows. Luxury homes are lingering on the market not just because buyers are losing jobs and wealth, but because jumbo loans are difficult to get.

But even buyers who can afford the discounted homes in upscale communities have to consider the everyday costs, says David P. Brady, a financial planner and owner of Brady Investment Counsel in the Chicago suburb of Geneva, Ill. "It might look like a great value, but once you think about all the costs…you might be a lot better off staying where you are," he says. "On the other hand, if it's your dream and you can afford it and understand the costs, we really are in a buyer's market for luxury."

Bob Goldman, a financial planner in Sausalito, Calif., says that he told a married couple, both around age 50 and earning a combined salary of more than $200,000 a year, that they would run out of money in about 30 years (based on his projections) unless they left California and moved to a more affordable state such as Washington, which has no state income tax. He suggested they wait four years until their two children graduate from high school. If they moved to Washington, "they would be fine and would be able to live out to 97," he says, without even having to reduce their spending.

Would-Be Sellers, Cut Costs Instead

Of course, moving typically requires selling an existing home in one of the worst housing markets in history. Ilyce Glink, a real estate columnist and publisher of ThinkGlink.com, says it's better to cut out the cable, the gardener, or the nanny than to begin the long, painful job of selling a home. And if other cost-cutting measures don't work, consider finding a tenant and moving to a less-expensive rental home elsewhere, she says. "It is easier to make a lifestyle change and not care about what other people think than to sell your house in the worst housing market in years," Glink says. "You have to stop caring about what the Joneses are doing. Frankly, they're in a similar position to what you are in."

Scott Bombeck, president of Acanthus Associates in Holes, Pa., agrees that it doesn't make sense to sell right now. As for buyers, he says they should consider what they're getting for their money. "Unless somebody said 'I'm a blue blood and need to be with blue bloods,' I would be saying, 'Why not look at more up-and-coming neighborhoods?…You might find that it is just as nice, and it just doesn't come with the price tag of the prestige."

The dollar whipsawed against the majors in early Friday trading following a key US labor report released for April. Traders initially bid the dollar higher on a better than expected reading in April non-farm payrolls, which improved by more than forecast, posting a loss of 539k jobs compared with calls for a loss of 600k payrolls versus an upwardly revised 699k loss in March. The April unemployment rate was in line with expectations, climbing to a fresh 25-year high at 8.9%, up from 8.5% from March. The better than anticipated payrolls figure prompted a move toward riskier assets as traders pushed the euro to a fresh one-month high against the greenback to the 1.36-level.

US equities climbed higher with the Dow Jones and S&P 500 higher by over 1% on a combination of sentiment that the recession may be moderating and the results from yesterday’s government bank stress tests. Crude oil and spot gold also climbed higher in the Friday session.