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, Random Roger (186 clicks)
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Roger Nusbaum submits: I took a stab at creating an ETF portfolio last night (it's listed below). The idea was not to have only a few ETFs and hope it is diversified, but more along the lines of trying to recreate the sector weightings, and some of the other things I have built into the accounts I manage.

According to Morningstar I came very close on the sector weighting. That is not a surprise, given the way that ETFs are structured -- you know what you are getting:

The portfolio misfired on almost every other aspect of trying to mimic my model portfolio.

The most disappointing was the dividends. The portfolio only yields 0.9%, which is way below the S&P 500. The cap size of the portfolio missed as well, coming in at only $18 billion vs. closer to $35 billion but I might be able tweak that with a broad based market cap ETF.

Foreign was only 21% of the portfolio. With a little bit more tweaking I could work in more foreign, but that might upset the sector applecart.

The performance of the allocation clearly beat the market over the last 12 months, which is encouraging but it would have been better with a decent yield:

All of that said, the portfolio is listed below with the weightings. Perhaps this can be a collaborative effort to make the improvements that are so desperately needed. To be 100% clear -- this is not a portfolio I would implement for anyone, as it is too flawed. This was nothing but an academic exercise.

Financials

StateStreet Bank (NYSEARCA:KBE) 8%
iShares Australia (NYSEARCA:EWA) 3%
iShares UK (NYSEARCA:EWU) 3%
StateStreet Capital Market (NYSEARCA:KCE) 2%

Tech

iShares Global Tech (NYSEARCA:IXN) 8%
PowerShares Semiconductor (NYSEARCA:PSI) 2%
iShares Taiwan (NYSEARCA:EWT) 2%

Health

iShares Global Health (NYSEARCA:IXJ) 10%
iShares Medical Device (NYSEARCA:IHI) 2%
StateStreet Biotech (NYSEARCA:XBI) 2%

Staples

iShares Consumer (NYSEARCA:IYK) 8%
PowerShares Food (NYSEARCA:PBJ) 5%

Discretionary

PowerShares Leisure (NYSEARCA:PEJ) 5%

Industrials

Industrial Sector SPDR (NYSEARCA:XLI) 5%
PowerShares Water (NYSEARCA:PHO) 2%
iShares Defense (NYSEARCA:ITA) 3%
iShares Transportation (NYSEARCA:IYT) 1%

Energy

iShares Global Energy (NYSEARCA:IXC) 5%
PowerShares Alt Energy (NYSEARCA:PBW) 1%
PowerShares E&P (NYSEARCA:PXE) 2%
PowerShares China (NYSEARCA:PGJ) 2%

Materials

Gold (NYSEARCA:GLD) 3%
iShares Brazil (NYSEARCA:EWZ) 2%
StateStreet Miners (NYSEARCA:XME) 2%

Utilities

Vanguard Utilities (NYSEARCA:VPU) 4%

Telecom

Vanguard Telecom (NYSEARCA:VOX) 3%
Emerging Market Telecom (NYSEMKT:ETF) 2% -- this is a closed end fund

REITs

StateStreet REIT (NYSEARCA:RWR) 3%

Source: A Model ETF Portfolio With Recognizable Flaws