A 'David Rosenberg' Inspired ETF Portfolio

I previously noted some of David Rosenberg's investment projections. Rosenberg is Chief Economist & Strategist for Gluskin, Sheff. To summarize, Rosenberg's themes were:

1. Commodities
2. Gold
3. Canadian dollar
4. Resource sectors of the stock market
5. U.S. sectors that have high foreign exposure (materials, tech, staples, health care)
6. Canadian sectors that benefit from lower import costs (consumer stocks) but lose export competitiveness (manufacturers)
7. Canadian bonds (a higher Canadian dollar will keep inflation low, hence reinforcing positive fixed-income returns)

A reader asked me if there was a list of ETFs to capitalize on these 'Rosenberg' themes. To my knowledge, not until today! Please note, these are not comprehensive portfolio suggestions and are by no means meant to infer specific investment recommendations by this author or David Rosenberg. These are simply a list of ETFs for further research if you believe his projections are correct.

1. Commodities -- There are numerous commodity ETFs, below are a few of the more popular ones. Before investing in a commodity ETF, please be aware of some of the extra risks involved.

• GSG - tracks the performance of a commodities index that features 24 individual commodities. Free GSG trend analysis Here
• DBC - based on the Deutsche Bank Liquid Commodity Index - Optimum Yield Excess Return (Index). The Index is a rules-based index composed of futures contracts on six of the most heavily-traded and important physical commodities in the world - crude oil, heating oil, gold, aluminum, corn and wheat. Free DBC trend analysis Here
• DBA - based on the Deutsche Bank Liquid Commodity Index – Optimum Yield Agriculture Excess Return (Index). The Index is a rules-based index composed of futures contracts on some of the most liquid and widely traded agricultural commodities – corn, wheat, soy beans and sugar. Free DBA trend analysis Here

2. Gold

• GLD - SPDR Gold Trust, the investment objective of the Trust is for the Shares to reflect the performance of the price of gold bullion.
• GDX - seeks to replicate as closely as possible the price and yield performance of the NYSE Arca Gold Miners Index

3. Canadian Dollar

• If you are not comfortable playing the FX market directly, you could either seek trading services that will provide the buy and sell indications for you, or FXC, the CurrencyShares Canadian Dollar Trust, which seeks to track the performance of the Canadian dollar.

4. Resource Sectors of the stock market - See point 1 or seek individual companies or ETFs that track individual companies in the resource markets. One such example:

• MOO - Designed to track the movements of securities of companies engaged in the agriculture business that are traded on global exchanges. The Index provides exposure to publicly traded companies worldwide that derive at least 50% of their revenues from the business of agriculture.

5. U.S. sectors that have high foreign exposure

• Materials - XLB, a SPDR ETF for the sector. Free XLB trend analysis Here
• Tech - XLK, a SPDR ETF for the sector. Free XLK trend analysis Here
• Staples - XLP, a SPDR ETF for the sector. Free XLP trend analysis Here
• Health care - XLV, a SPDR ETF for the sector. Free XLV trend analysis Here

6. Canadian sectors

• I am not aware of liquid ETFs that offer exposure here - you may be better served seeking individual names. However, if you are interested in investing in Canada as whole, EWC seeks to track the MSCI Canada Index, a measurement of the Canadian equity market.

7. Canadian bonds

• There is no liquid ETF focusing exclusively on Canadian Bonds. However, I have previously detailed the correlation of global bond ETFs. One could seek to invest in a diversified basket of global bonds via BWX or seek a currency investment in a rising Canadian dollar via point 3.

Disclosures: None

Comments

[mbkelly75]

Nicely done overall. Thanks for the effort that this took. I do have a couple of comments though:
1) I would use GTU rather than GLD. CEF would give an exposure to both Gold and Silver in a balanced way - that might be better than Gold alone also.
2) I am not aware of a Canadian Bond Fund either, but there are some outstanding Canadian Stocks paying dividends in the Loonie that beat heck out of Bond income anyway. A basket of 5 or so diversified ones might be the way to go here.

2009 Oct 04 02:51 PM