EverBank Returns to Its Earlier Monkey Business Following TIAA Acquisition

EverBank today launched a 3-year MarketSafe Emerging Currency CD. I could write ad nauseum here about how inappropriate this investment is for most unsuspecting investors. I could write about why it shouldn’t be called a Certificate of Deposit. I could write about how I believe that EverBank is violating the 1933 SEC Act. But, wait a minute. I already did. This product is exactly the same as a product that EverBank offered in 2014 and that I wrote about extensively then (see my article here), except that they have replaced one dictatorship’s currency for another (swapping out the Russian ruble for the Turkish lira) and decided that Indonesia’s rupiah is more attractive than South Africa’s rand. The Chinese renminbi, the Indian rupee and the Brazilian real, however, remain constants in this product. The other things that remain a constant is that neither the people offering it nor those buying it have any idea what they are doing, and those buying it will not see any appreciation on their investment.

As a general proposition, this is the wrong time in the cycle to be playing with emerging markets, although some countries have unique circumstances that will enable them to outperform (perhaps Argentina). If you must invest, the play is to invest in those countries or in U.S. or European denominated debt through a fund offered by a big fund family that knows what they are doing in emerging markets (maybe Ashmore). And, if you insist on investing in currencies, the major investment banks offer structured products geared to lever appreciation in U.S. dollar terms should another currency (a single currency) appreciate against it. Under any circumstance, avoid this EverBank product.

The best 3-year CD rates are listed here.