Alpha Seeker 2.0 ETFdb Portfolio

Published on by on October 14, 2009 | Updated February 1, 2013

Portfolio Strategy

Intermediate Risk Tolerance Intermediate to Long Time HorizonIntermediate Current IncomeThe Alpha Seeker 2.0 ETFdb Portfolio is designed for investors who believe in the benefits of quantitative analysis and active management, but also want to capitalize on the benefits offered by the exchange-traded fund structure, including reduced costs, increased tax efficiency, and enhanced liquidity. The asset allocation strategy for this ETFdb Portfolio was constructed assuming investors have a relatively high risk tolerance, and are willing to make investments in asset classes beyond fixed income and equities. Instead of focusing on beta and using passively-indexed ETFs that predominantly rely on market capitalization-weighting methodologies, we selected ETFs that implement various degrees of quantitative analysis in an attempt to capture alpha.

Over the last 30 years, use of passive indexing as an investment strategy has increased significantly, as several academic studies have shown that the majority of portfolio returns are attributable not to individual stock selections, but to broad asset allocation strategies. Many investors point to the rise of the ETF industry as a clear indication of a dramatic shift in investor sentiment away from costly active management towards more cost-efficient indexing strategies. Most ETF assets are invested in passively-indexed funds that own the entire benchmark rather than attempting to select individual securities expected to outperform the broader markets.

Pro Membership Required to Continue Reading ETFdb Pro

To continue reading this article, you must be an ETFdb Pro member. Please login or begin your 14-day free trial to continue reading. There are several benefits to becoming an ETFdb Pro member today:
  • Register on ETFdbAccess to 50+ All-ETF model portfolios. Whether you're a long-term, buy-and-hold investor or a more active trader looking to establish a tactical position, our collection of ETFdb Portfolios has something for everyone.
  • ETFdb Realtime Ratings show you exactly where each fund stacks up next to the competition. Get objective, in-depth, custom research on every ETF.
  • Pro members have Unlimited Excel Download capabilities across the entire database; users can easily download more than 200 data filled paged and also export results to Microsoft Excel from every tool.
  • Get ETF Picks of the Month. For active investors seeking ETF investment ideas, our team analyzes technical and fundamental price drivers of more than 1,400 ETFs to identify both short and longer-term opportunities with a focus on absolute returns. Recommendations are actionable investment ideas that are poised for outperformance over the next week to 90 days.

Begin Your Free 14-Day Trial Now