ETF Presentation

Yesterday I gave my presentation at the Vancouver MoneyShow on portfolio construction using specialized or narrow based ETFs. I think the general thread went well and I think/hope that I put the context and progression together in a way that made sense.

Below I will lay out the funds used but will avoid percentages in this forum as that could be a compliance issue. The point is not to run out and copy this portfolio. I don't use this mix for anyone and in fact as you will see in the disclosures at the bottom I use a very small number of these funds. The point is to think about how funds can interact with other funds to creates effects, access themes and countries and manage volatility and other portfolio attributes.

Technology

iShares DJ US Technology Sector Index (IYW)
iShares MSCI Taiwan Index (EWT)
First Trust NASDAQ Clean Edge Smart Grid (GRID)

Financials

iShares DJ US Financial Sector Index (IYF)
WisdomTree Pacific ex-Japan Equity Income (DNH)
Claymore/Beacon Global Exchanges (EXB)

Energy

WisdomTree International Energy (DKA)
SPDR S&P Gas Equipment & Services (XES)
GlobalX China Energy (CHIE)

Healthcare

SPDR S&P International HealthCare (IRY)
iShares DJ US Medical Devices (IHI)

Industrials

iShares S&P Global Infrastructure Index (IGF)
PowerShares Water Portfolio (PHO)
First Trust Global Wind Energy (FAN)
iShares DJ US Aerospace & Defense (ITA)

Staples

PowerShares Dynamic Food & Beverage (PBJ)
Consumer Staples Select Sector SPDR (XLP)

Discretionary

Market Vectors Gaming (BJK)
Consumer Discretionary Select Sector SPDR (XLY)

Materials

EG Shares INDXX Brazil Infrastructure (BRXX)
PowerShares Global Ariculture (PAGG)
First Trust ISE Platinum (PLTM)

Telecom

Vanguard Telecom Services (VOX)

Utilities

*iShares S&P Global Infrastructure Index
*First Trust Global Wind Energy

Other

IndexIQ Hedge Macro Tracker (MCRO)
ETFS Physical Gold Shares (SGOL)

*Both part of the industrial sector allocation but are both about 40% utilities and so the utilities from these funds create enough exposure for a modest underweight which could make sense if interest rates go up.

Client or personal holdings to disclose are IYW, IYF, DNH, DKA, IGF, PHO, XLY, BRXX and VOX. So only nine of 25 ETFs are held by clients and no client owns all nine but many clients own five of those funds. For the presentation I talked a little about each of the funds like what they hold, what they avoid and some other characteristics and as I told the audience I would hope that anyone interested in constructing a portfolio in this way would take the time to look under the hood and draw their own conclusions but funds from the same sector can be incorporated into a portfolio but still avoid overlap.

The picture is from a neat little town north of Vancouver called Deep Cove. I had the best doughnut of my life at Honey's, even better than Voodoo Doughnuts in Portland.