 |
Vanguard ETF: |  |
7.4%* |
|
Diversified Core: | |
8.1%* |
|
Six Core Asset ETFs: | |
7.3%* |
Articles on GTAA
- 5 Assets for a Global Banking Crisis?
08/17/2011
"Don’t interpret last week’s volatility as merely a reaction to S&P’s downgrade of US Treasury debt, according to Doubleline founder and chief investment officer Jeffrey Gundlach. Investors are actually fearful of a global banking crisis, he said, because many countries face a perilous choice – defaulting on their sovereign debt or inflating their way out of trouble." Reported in the following article
Gundlach - 'The Cusp of a Global Banking Panic' advisorperspectives.com
So if there is another Lehman like default from Euro zone, what are the similar and different positions one can take in a retirement investing portfolio such as in their 401k or IRA accounts?Similar to 2008 Lehman crisis, the following asset will do well:- Treasury bonds (TLT) (IEF): it is no different this time, even after S&P's downgrade of the U.S. debt rating, the U.S. treasuries remain the world's most liquid safe haven.
Unlike 2008, the following assets will be resilient- Gold (GLD): with the U.S. dollar's rapid devaluation as well as stimulus policies adopted by governments around the world, gold remains the only one asset that people can trust as a hard currency.
- Other commodities (DBC): though its underlying fundamental is not as strong as gold, commodities will be a good hedge for both sides: if the crisis does not happen, the demand of commodities from emerging markets and other economies will be strong. If the crisis does happen, the U.S. policy to devalue the dollar through more stimulus or other tools will still make commodities relatively strong relative to U.S. dollars.
- U.S. total bonds (AGG) (BND): in general, US coporate balance sheets are exceptionally strong and coupled with government treasury bonds' strength, this asset class will withstand the crisis better this time.
Check out MyPlanIQ Diversified Core Allocation ETF Plan and Six Core Asset ETFs. See how the portoflios are compared with other tactical asset allocation ETFs or mutual funds in our latest newsletter or through this comparison link. - 6 Hedge Fund ETFs for Average Investors
07/17/2011
This weekend's Barron's has an article Hedge-Fund Strategies for the Masses that discussed the following ETFs:
WisdomTree Managed Futures Strategy (WDTI) Credit Suisse Merger Arbitrage Liquid Index ETN (CSMA) Cambria Global Tactical ETF (GTAA) Credit Suisse Long/Short Liquid ETN (CSLS) Regular readers might be familiar with our report published on SeekingAlpha 5 Hedge Fund ETFs to Watch. These ETFs are monitored weekly on our ETFs in asset classes page.The following shows the performance table:
As of 07/15/2011
Description Symbol 1 Yr 3 Yr 5 Yr Avg. Volume(K) 1 Yr Sharpe IQ Hedge Multi-Strategy QAI 5.2% NA NA 30 130.52% Credit Suisse Merger Arbitrage CSMA NA NA NA 28 NA Mars Hill Global Relative Value GRV -13.38% NA NA 10 -101.0% PowerShares S&P 500 BuyWrite PBP 4.27% -1.32% NA 31 74.32% ProShares Credit Suisse 130/30 CSM 20.51% NA NA 19 146.25% Cambria Global Tactical ETF GTAA NA NA NA 53 NA Cambria Global Tactical ETF (GTAA) was just recently added to the table. This ETF is managed by Mebane Faber and Eric Richardson, authors of The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets.
Mebane Faber is no stranger to MyPlanIQ's strategies. Our tactical asset allocation strategy bears some similarity with some ideas proposed in his articles. It is thus interesting to undestand more on this ETF.
Based on Barron's, GTAA's neutral allocation is 20% in five categories: real estate, commodities, bonds, U.S. stocks and foreign stocks. These five assets are part of our six core asset classes (other than emerging market stocks). The fund holds about 80 ETFs. Let's compare it with our simplest Six Core Asset ETFs Tactical Asset Allocation Moderate Portfolio.
Portfolio Performance Comparison
Portfolio/Fund Name 2010 2011 2011 Sharpe 2011 Drawdown GTAA 1.96% 2.19% 0.46 6.1% Six Core Asset ETFs Tactical Asset Allocation Moderate 9.27% 4.25% 0.49 4.6% S&P 500 (SPY, SPX) 14.58% 5.7% 0.84 6.9% Since GTAA was started on 10/26/2010, the comparison in 2010 is not meaningful. Furthermore, with the fund's $184 million asset size, it is understandable that it tries to invest in many ETFs for diversification purpose.
Since all of these hedge funds are very new, investors need to monitor these for a while to fully understand how they behave. However, with its simplicity and long history of practice in wealth management, we have confidence on GTAA's future.
Symbols: SPX, DJI, GTAA, QAI, CSMA, CSM, GRV, PBP, Hedge Funds
Exchange Tickers: (GTAA), (QAI), (CSMA), (CSM), (GRV), (PBP), (SPY)
