ETFdb Portfolios: August 2011
In this segment of ETF Edge, we present our all-ETF portfolio developed and monitored by members of ETF team. The following portfolio is designed with a long-term investment objective, but short-term flexibility. That means that we employ a core-and-explore strategy: maintaining core holdings in traditional asset classes while also seeking to capitalize on short-term mispricings in the market.
Eric Dutram’s All-ETF Portfolio
Below ETFdb Analyst Eric Dutram outlines his all ETF portfolio:
|Ticker||ETF||Position||Weighting||Monthly Gain (Loss)||Since Purchase|
|VTI||Vanguard Total Stock Market ETF||$23,197||20.6%||-2.3%||+16.4%|
|PRFZ||U.S. Small-Mid Portfolio||$12,216||10.8%||-3.1%||+10.8%|
|BICK||BICK Index Fund||$13,226||11.7%||-2.4%||+11.7%|
|EWM||iShares MSCI Malaysia Index Fund||$6,073||5.4%||-1.4%||+21.9%|
|PBJ||PowerShares Food & Beverage ETF||$10,349||9.2%||-1.9%||+25.7%|
|RWO||Global Real Estate SPDR||$5,127||4.6%||+0.1%||+12.0%|
|EMLC||Emerging Markets Local Currency Bond ETF||$6,380||5.7%||+1.5%||+5.7%|
|DWM||WisdomTree DEFA Fund||$9,684||8.6%||-3.5%||+7.4%|
|BWX||SPDR Barclays International Treasury Bond||$5,389||4.8%||+1.6%||+8.2%|
|FWDB||Madrona Forward Global Bond ETF||$8,792||7.8%||+0.3%||+0.2%|
|REMX||Market Vectors Rare Earth.Strategic Metals ETF||$5,002||4.4%||-3.1%||-4.9%|
|GCC||GreenHaven Continuous Commodity Index Fund||$6,549||5.8%||+2.9%||+31.4%|
Month In Review
June was another poor month for my all ETF portfolio as strength in the beginning and towards the end of the period wasn’t enough to balance out the deficit induced weakness. The equity portions of my portfolio were by far the hardest hit as the EFA-focused product, DWM, fell by the most in the period, slumping by 3.5%. This was largely the result of sovereign debt fears hitting larger European markets such as Spain and Italy, two nations that really can’t be bailed out by anyone. Other big losers came from the small and mid cap selection as well as REMX, as these two products represent very volatile securities that are often the most impacted in a downturn, but are also some of the biggest gainers when markets surge. In terms of gainers, the bond components did pretty well as did the commodity fund, GCC. Fixed income was led by the international bonds as both EMLC and BWX rose by at least 1.5% in the month. This was largely due to further weakness in the dollar as both of these products are denominated in local currencies so when the greenback experiences declines, both of these products tend to benefit.
I chose not to make any changes to my portfolio this month as there are just too many questions surrounding key markets to adjust positions with any confidence. I will wait until we see true progress to reign in the national debt here and until the euro zone gets its act together on the PIIGS front before moving into any other high risk equities. If anything, I may consider dialing back exposure to VTI and reallocating this to one of the bond products instead. Additionally, if further economic weakness ensues, I may remove the position in REMX as well; the product is good for the long term but may not be appropriate for the medium term focus for which this portfolio is targeted.