ETF Portfolios

Includes: GDX, LQD, VEU
by: Roger Nusbaum

CNBC posted ETF portfolios devised by its ETF Advisory Counsel targeting different ages for 50 year olds with "less than 20 years until retirement." The asset allocation was 5% into cash, 50% in equities, 20% in fixed income and 25% into a category called opportunity which was a mix of equities, bonds and cash.


Guggenheim Enhanced Short Duration Bond ETF (NYSEARCA:GSY)


Schwab US Dividend (NYSEARCA:SCHD)
Vanguard Mid Cap ETF (NYSEARCA:VO)
First Trust Health Care ETF (NYSEARCA:FXH)
Vanguard FTSE All World ex-US (NYSEARCA:VEU)
WisdomTree Emerging Markets ETF (NYSEARCA:DEM)
EG Shares Emerging Market Consumer ETF (NYSEARCA:ECON)
PowerShares S&P International Developed Low Volatility (NYSEARCA:IDLV)

Fixed Income

iShares Core Total US Bond Market ETF (NYSEARCA:AGG)
iShares iBoxx Investment Grade Corporate Bond ETF (NYSEARCA:LQD)
WisdomTree Emerging Markets Local Debt (NYSEARCA:ELD)


PowerShares Sentior Loan Portfolio (NYSEARCA:BKLN)
Market Vectors Gold Miners ETF (NYSEARCA:GDX)
Vanguard Global ex-US Real Estate ETF (NASDAQ:VNQI)
Peritus High Yield ETF (NYSEARCA:HYLD)
PowerShares DB US Dollar Index Bullish (NYSEARCA:UUP)

There are also portfolios for 30 year olds and 70 year olds. This PDF provides details about the Counsel, the benchmarks and other related information. The link above has the suggested percentages and the PDF gives the impression that this will be reviewed regularly and actively managed.

The general framework seems like a core to explore sort of mix which is valid. The portfolios seem to be limited to ETPs which makes sense in relation to how it is being presented but seems like an arbitrary constraint in real life.

It was not clear to me what type of investor these are targeted to but keeping tabs on 17 ETFs, even if several of them are very broad, seems like it would require a fair bit of time, more than the person seeking this type of help would probably want to take on.

In terms of critiquing the portfolio obviously something like VEU is going to be heavy in places where you may not want to be (I don't anyway) like Western Europe and Japan (37% and 13% respectively). The duration for LQD could be a problem if rates ever rise so anyone adopting the portfolio will be relying on the Counsel's judgment on when to reduce duration. There is also a heavy weighting to high yield debt but again this space is mostly working for now, hopefully the Counsel will recognize when that tide turns. GDX is down a lot and the chart looks terrible but maybe it is a well timed buy, or not, no idea, but it does seem to be very contrarian based on the trend.

Check the portfolios out, let me know what you think.