A new all-ETF model portfolio is now available to ETFdb Pro members; the Simple (But Effective) Safe Haven ETFdb Portfolio offers a concentrated collection of ETFs constructed with risk-averse investors in mind who are looking to temporarily scale back risk instead of fleeing from equity markets altogether.
Investing in safe haven asset-classes may appeal to investors for a wide variety of reasons in the current economic environment. First and foremost, when volatility and panic-selling hit Wall Street, investors are (very) quick to re-allocate assets to “safer” corners of the market. Also, safe haven asset-classes, like gold and U.S. Treasuries, tend to attract capital inflows when the stock market appears directionless and investor sentiment is pessimistic. Investors should consider using this portfolio, or certain parts of it, as a tactical allocation to complement their existing holdings during times of economic uncertainty or when they simply need to scale back their risk appetite.
The new Simple (But Effective) Safe Haven ETFdb Portfolio is designed for investors who want to a build portfolio, or complement existing holdings, with exposure focused exclusively on safe haven asset classes. This portfolio is not simply an allocation to money market funds; rather, it is a unique blend of equity, commodity, and fixed income holdings that has performed relatively well during volatile times. From a historical perspective, this portfolio has a tendency to either surpass or match the performance of the S&P 500, during both the 2008 slump and in the subsequent years of recovery. However, the volatility for this ETFdb Portfolio is significantly less in each instance, making for a very appealing risk/return profile.
Investors should note that this is not considered to be a viable long-term portfolio, since it lacks proper diversification across market cap levels and excludes exposure to emerging markets almost entirely. The Aggressive ETFdb Portfolio on the other hand, will appeal to investors who are willing and able to stomach more risk, in exchange for an equity-heavy portfolio that is well positioned to gain from a continuing global economic recovery.