An ETF Portfolio from XTF Advisors

ETF Investor ran an article written by XTF Advisors, writes Roger Nusbaum. The article compares DVY (personal holding) and PEY. It is a good read if you are interested in dividend paying ETFs.

I was more interested to see what XTF does in the way of all ETF Portfolios. This the one sample I was able to find. I don't know if it is a real portfolio but it doesn't seem logical that a firm would create a fake portfolio with such detail.

Either way lets assume its real. I plugged this portfolio into Morningstar assuming $100,000 invested.

Over the last twelve months this portfolio has almost exactly matched the returns of the S+P 500. Additionally the overall yield is 2.67% as of now and while it might have been a little different twelve months ago, you get the idea. The portfolio has had close to market returns with only 70% invested in equities. I'd say that is pretty good.

Also revealed in the Morningstar X-Ray is that it is heavily tilted toward value and noticeably overweight financials, 26% to 19% for the S+P 500.

Anyone may want to structure a portfolio differently than this or not but the take away here should be that a lot more firms will offer all ETF portfolios. If this type of product appeals to you I recommend asking for an X-Ray kind of report on what they propose or spend the money and figure it yourself on Morningstar, or something similar.

I think this particular portfolio does not have enough foreign and I think this is the wrong time to overweight financials but every portfolio has flaws. The two I see right away with this one are either right or wrong but I think there is value in having this type of information.

Related:

• The XTF portfolio quoted in this article quotes the following ETFs (clicking on a link pulls up articles for the ETF in question): IWB, IWD, VB, VO, LQD, EFA, and ICF.
• The complete list of funds (and links to articles about them) covered by ETF Investor.

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Comments

[paa1404:]

strange that they have so little mid and small cap such that the US equities portion is essentially total-stock market, replaceable with a simple TSM fund.

also, why LQD? in an efficient-frontier sense, that is longer than you want your bond duration to be.

perhaps they give more detailed portfolio advice to paying customers.

~paul

2005 Sep 12 02:19 PM

[xtfgroup:]

The portfolio you see is just a sample from an old portfolio which was posted on our website for demonstration. Please register (registration is free) at xtf.com which will allow you to demo our advanced tactical asset allocation tools and subscribe to XTF Insight - our monthly newsletter. Our mission is to guide investors into cost efficient portfolios of ETFs that best achieve their long-term goals. These tools will allow you to invest on the efficient frontier - targeting the greatest potential return at the lowest level of risk. Using portfolios of ETFs allows us to do this at lowest cost helping to maximize your return.

I hope this was helpful, pls feel free to email us if you have any more questions and thanks Dave and Roger for moderating such a informative site about ETFs. ETFs are the future...let's spread the word.

2005 Sep 12 07:23 PM