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  • Equal Allocations Of The All Seasons Portfolio Favor Safe Funding 0 comments
    Oct 19, 2013 3:42 AM

    Designed to weather market volatility, this all weather ETF focuses on the allocation of assets to gold and silver ETFs and on U.S. Treasuries comprising of equity stocks, short term bonds, and long term bonds. The benefits of including this portfolio in the investors baskets are that firstly they react differently to the following conditions: - growth, recession, inflation and deflation. Twenty Five percent of the allocations are allotted equally to these four different market environments. Providing market returns through indexing is another benefit that the fund provides as it consists of both exchange-traded products as well as individual holdings.

    The whole idea of an all seasons portfolio is to utilize the best ETFs for the times that they can score the best returns. At the season of booms the best scorer are the stocks, similarly at the time of bust the bonds show their creditability. Gold is a safe haven and deals with inflation with ease and poise. Cash saves the day at times of deflation. The diversity of the portfolio leads to a cautious policy that no investment exceeds the 25% ratio or else rebalancing is undergone once more. This way an expert choice is made of the right type of investments that will last for a long time. With the numerous financial vehicles in markets, this fund brings a certain sense of diversification with in a safety wall and profitable returns.

    This ETF works on the guidelines of Harry Browne's 1980 model, which ensures that at any point of time of distress in the economy by the four influential factors there is always one of the funds that is earning well out of the 25% allocation. What this means is that there is higher probability of positive median returns, albeit the economic forces that cause hindrance in favorable returns.

    In order to maintain a proper balance of the fund under goes a phase of rebalancing annually. This helps in rebuilding a sense of security among the investors that are looking for an investment opportunity without having been under constant worry of the safety of the savings managed by these investments.

    This simple portfolio helps you not to put your lives savings at a risk and gives the best option of embracing a four asset exchange trade fund that works well even under the most extreme and serious unexpected economic events. The diversification of the fund extends to the group of REITS, natural resources, large cap & small cap U.S. stocks and foreign equities.

    Permanent Portfolio mutual fund (PRPFX) has a good 30-year track record, though it does not quite adhere to Harry Browne's concept but still fairly works on the same guidelines. This mutual fund uses gold bullion and coins, unlike the Global X Permanent ETF which deals in the Gold and Silver ETFs. More over the Mutual Fund also includes 10 % portion to Swiss Franc holdings which are not a favorable asset as they are low yielding securities.

    The overall picture and analysis also shows a difference in the Expense ratios where the PERM scores a better deal with a lower annual expenses ratio to its favor.

    Global X Permanent ETF - PERM delivers as per the performance of Solactive Permanent Index. Short and long term US treasuries make up of approximately 50% of the holdings belonging to the All Weather ETF . The rest of the holdings are held among the US small and large cap equities along with the REITs stocks. The physical Gold and Silver account for a little less than 16%, international equities 3.53%, Natural Resources equity and Materials make up 10,26% of the rest of the all seasons portfolio and its underlying index.

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