Vanguard Long-Term Corporate Bond ETF (NASDAQ: VCLT)

에 대한 최신 뉴스 Vanguard Long-Term Corporate Bond ETF (NASDAQ:VCLT)

Vanguard Long-Term Corporate Bond ETF

The fund employs an indexing investment approach designed to track the performance of the Bloomberg Barclays U.S. 10+ Year Corporate Bond Index. This index includes U.S. dollar-denominated, investment-grade, fixed-rate, taxable securities issued by industrial, utility, and financial companies, with maturities greater than 10 years. Under normal circumstances, at least 80% of the funds assets will be invested in bonds included in the index.

Vanguard Long Term Corporate Bond ETF

Unlike government bonds, corporate bonds have one major advantage: they offer strong returns.
When investing in corporate bonds, there are many variables an investor should consider such as credit risk, interest rates, Federal Reserve policy, and the <a href="https://www.benzinga.com/trading-ideas/long-ideas/22/10/29225539/this-congressman-just-dumped-his-shares-of-intel-and-bought-these-two-treasury-bond-etfs">size of their position</a>. Additionally, there are many types of bonds to consider such as short-term, medium-term and long-term bonds which have maturities ranging from five years or less, five to twelve years, and more than twelve years, respectively.
This is why some investors may prefer to invest in actively managed exchange-traded funds that seek to invest in the maturities of their preferences.
See Also:&nbsp;<a href="https://www.benzinga.com/etfs/22/10/29178291/3-reasons-to-invest-in-treasury-etfs-over-treasuries-themselves">3 Reasons To Invest In Treasury ETFs Over Treasuries Themselves</a>
<ul>
<li>Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/vclt#NASDAQ">VCLT</a>) is offering a dividend yield of 4.56% or $3.28 per share annually, making monthly payments, with an inconsistent track record of increasing its dividends. Vanguard Long-Term Corporate Bond ETF seeks to track the performance of a market-weighted corporate bond index with a long-term dollar-weighted average maturity. The fund currently has total assets under management of $4.8 billion with a turnover rate of nearly 36%. The Bloomberg U.S. 10+ Year Corporate Bond Index measures the investment return of U.S. dollar-denominated, investment-grade, fixed-rate, taxable securities issued by industrial, utility, and financial companies with maturities greater than 10 years.</li>
<li>BlackRock Ultra Short-Term Bond ETF (BATS: <a class="ticker" href="https://www.benzinga.com/stock/icsh#BATS">ICSH</a>) is offering a dividend yield of 0.95% or 47 cents per share annually, through monthly payments, with an inconsistent track record of increasing its dividends. BlackRock Ultra Short-Term Bond ETF seeks to provide current income consistent with the preservation of capital. The fund seeks to provide income by investing in a broad range of short-term U.S. dollar-denominated investment-grade fixed- and floating-rate debt securities and money market instruments. The fund has assets under management north of $6.9 billion and a management <a href="https://www.benzinga.com/etfs/22/10/29206774/single-stock-etfs-are-on-the-rise-understand-these-core-principles-before-investing">fee of 0.08%</a>.</li>
</ul>

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Long-Term Vs. Short-Term: Which Of These Monthly-Paying Corporate Bond ETFs Is Right For You?

Vanguard is the second-largest U.S. issuer of exchange traded funds by assets, but its stable of ETFs is small compared to issuers of a similar size. While many large ETF issuers launch several new products per year or have launches numbering in the double digits, Vanguard eschews that strategy.
When Vanguard launches new ETFs, they are usually successful and often attain that success in short order. Time will tell if that&#39;s the case for the Vanguard Total Corporate Bond ETF (NASDAQ: VTC), which debuted Thursday as Vanguard&#39;s first ETF of 2017.
The Vanguard Total Corporate Bond ETF is the first new ETF introduced by Pennsylvania-based Vanguard since the firm launched the Vanguard International Dividend Appreciation ETF (NASDAQ: <a class="ticker" href="/stock/vigi#NASDAQ">VIGI</a>) and the Vanguard International High Dividend Yield ETF (NASDAQ: <a class="ticker" href="/stock/vymi#NASDAQ">VYMI</a>) a year-and-a-half ago.
<h3>
	Good Timing</h3>
Some new ETFs benefit from good timing, and that could be the case with the Vanguard Total Corporate Bond ETF. Investors are flocking to investment-grade corporate bond ETFs this year, with two such funds being among this year&#39;s top 10 asset-gathering ETFs. That duo includes the Vanguard Intermediate-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vcit#NASDAQ">VCIT</a>).
VTC, the new Vanguard ETF, tracks the Bloomberg Barclays U.S. Corporate Bond Index. The new ETF charges 0.07 percent per year, or $7 on a $10,000 investment, making it less expensive than 91 percent of rival funds, <a href="https://personal.vanguard.com/us/funds/snapshot?FundId=0985&amp;FundIntExt=INT#tab=0">according to issuer data</a>.&nbsp;
VCT is the 17th fixed income ETF in Vanguard&#39;s lineup. In addition to the new ETF and the aforementioned VCIT, Vanguard&#39;s corporate bond ETFs include the Vanguard Short-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vcsh#NASDAQ">VCSH</a>) and the Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>).
<h3>
	Broad Exposure</h3>
As is usually the case with Vanguard ETFs, VCT features a massive roster. By using an ETF-of-ETFs structure that equates to VCT holding the other Vanguard corporate bond ETFs mentioned here, the new fund has one of the largest number of components among any corporate bond fund.
&ldquo; The ETF-of-ETFs structure enables the fund to immediately access more than 5,500 U.S. corporate bonds by taking advantage of the existing exposure and scale offered by the underlying ETFs,&rdquo; <a href="https://pressroom.vanguard.com/news/Press-Release-Vanguard-Launches-Total-Corporate-Bond-Fund-110917.html">according to a statement</a> issued by Vanguard. &ldquo;This approach achieves near complete replication of the benchmark at the fund&rsquo;s inception as well as tighter bid/ask spreads and lower operating expenses than investing directly in the benchmark&rsquo;s constituents.&rdquo;&nbsp;
With over 5,500 holdings, VCT&#39;s roster is roughly triple the size of the largest investment-grade corporate bond ETF.
Related Links:
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Vanguard's First New ETF Of 2017 Is A Corporate Bond Fund

One of the primary reasons investors have embraced exchange-traded funds over the years is lower fees relative to actively managed equivalents. ETF issuers continue rewarding that faith with a &ldquo;race to the bottom&rdquo; outlook on ETF expenses.
Predictably, Vanguard plays a big role in the trend of lower ETF fees, and after a recent spate of fee cuts from rival issuers, the Pennsylvania-based fund giant is again making its low fee presence felt.
On Thursday, Vanguard, the second-largest U.S. ETF issuer, announced fee reductions on 35 mutual fund classes, including 11 ETFs. But before we get to that good news, there is some bad news ... sort of.
<h3>Fee Raise</h3>
Vanguard slightly raised the annual expense ratio on the Vanguard Health Care ETF (NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>) to 0.1 percent from 0.09 percent. Fidelity, one of Vanguard&#39;s chief competitors, offers the ETF industry&#39;s<a href="http://www.benzinga.com/trading-ideas/long-ideas/16/10/8556957/fidelity-has-a-say-in-etf-fee-tussle"> least expensive lineup</a> of sector ETFs.
<h3>Fee Cuts</h3>
The 11 ETF fee cuts unveiled by Vanguard include a significant portion of the issuer&#39;s fixed income lineup. All of the following saw annual fees reduced to 0.07 percent from 0.1 percent:
<ul>
<li>Vanguard Extended Duration Treasury ETF (NYSE: <a class="ticker" href="/stock/edv#NYSE">EDV</a>).</li>
<li>Vanguard Intermediate-Term Bond ETF (NYSE: <a class="ticker" href="/stock/biv#NYSE">BIV</a>).</li>
<li> Vanguard Intmdte Tm Govt Bd ETF (NASDAQ: <a class="ticker" href="/stock/vgit#NASDAQ">VGIT</a>).</li>
<li>Vanguard Long Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>).</li>
<li>Vanguard Lg Term Govt Bd ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>).</li>
<li>Vanguard Mortgage Bkd Sects ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>).</li>
<lI>and the Vanguard Short Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vcsh#NASDAQ">VCSH</a>).</li>
</ul>
Three of Vanguard&#39;s mega-cap equity ETFs now sport annual expense ratios <a href="https://pressroom.vanguard.com/nonindexed/Fact-sheet-first-wave-expense-ratio-changes-122216.pdf">of 0.07 percent</a>, down from 0.09 percent. Those ETFs are the Vanguard Mega Cap ETF (NYSE: <a class="ticker" href="/stock/mgc#NYSE">MGC</a>), Vanguard Mega Cap 300 Growth Index ETF (NYSE: <a class="ticker" href="/stock/mgk#NYSE">MGK</a>) and the Vanguard Mega Cap Value Index ETF (NYSE: <a class="ticker" href="/stock/mgv#NYSE">MGV</a>).
<h3>Fee Wars</h3>
&ldquo;In 2004, when Vanguard managed $6 billion in ETF assets, the average expense ratio for Vanguard&rsquo;s ETFs was 0.22 percent. Today, Vanguard manages $593 billion in U.S. ETF assets. The average expense ratio of the firm&rsquo;s ETFs is 0.12 percent, or less than one-third that of the 0.53 percent industry average,&rdquo; said Vanguard<a href="https://pressroom.vanguard.com/news/Press-release-VG-announces-first-wave-expense-ratio-changes-12-22-16.html"> in a statement</a>.
Vanguard&#39;s latest fee cuts answer <a href="https://www.benzinga.com/trading-ideas/long-ideas/16/12/8824318/blackrock-fee-cuts-extend-into-smart-beta-realm">two such moves </a>this year, including one this month, by rival BlackRock, Inc. (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) and one fee reduction announcement by Charles Schwab Corp (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>).

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Vanguard Has Its Say In ETF Fee War

One of the primary reasons advisors and investor love Vanguard exchange traded funds are the low fees. Pennsylvania-based Vanguard, the third-largest U.S. ETF issuer, has some of the lowest fees in the ETF business, and the company has consistently shown during its time in the ETF industry that as its funds swell in size, it will pare annual expense ratios.

	&nbsp;

	Forgive the Christmas comparison, but Santa arrived a few days early for Vanguard investors this year as the company said Tuesday it is lowering fees on 21 of its ETFs. That includes Vanguard&#39;s group of 10 sector ETFs. With the new, lower fees, Vanguard undercuts rival Fidelity as having the least expensive sector ETFs on the market today.

	&nbsp;

	Previously, Vanguard sector ETFs charged 0.12 percent a year, or $12 per $10,000 on its sector ETFs. Now, the Vanguard Health Care ETF (NYSE: <a class="ticker" href="/stock/vht#NYSE">VHT</a>) sports an annual fee of just 0.09 percent while other popular Vanguard sector offerings, such as the Vanguard Information Technology ETF (NYSE: <a class="ticker" href="/stock/vgt#NYSE">VGT</a>) and the Vanguard Consumer Staples ETF (NYSE: <a class="ticker" href="/stock/vdc#NYSE">VDC</a>), will charge 0.1 percent per year. VGT is known for having <a href="http://www.benzinga.com/trading-ideas/long-ideas/15/10/5941514/with-one-exception-apple-etfs-calm-ahead-of-earnings">one of the largest weights</a> to Apple Inc. (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>) among all ETFs.&nbsp;

	&nbsp;

	&ldquo;Vanguard continues to set the standard as the industry&rsquo;s low-cost leader, reducing costs not just on a subset of products, but across our funds and ETFs,&rdquo; said Vanguard CEO Bill McNabb <a href="https://pressroom.vanguard.com/content/press_release/Press_Release_Vanguard_Reports_Lower_Expense_Ratios_53_Funds_ETFs_122215.html">in a statement</a>. &ldquo;We have a track record of nearly 40 years of lowering the cost of investing for our clients and we have every intention of continuing to lower the cost of investing.&rdquo;&nbsp;

	&nbsp;

	Eight fixed income ETFs issued by Vanguard also saw annual fees reduced by 17 percent to 0.1 percent from 0.12 percent. The group includes the Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>), Vanguard Long-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>), Vanguard Mortgage-Backed Securities Index ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>) and the Vanguard Intermediate-Term Bond ETF (NYSE: <a class="ticker" href="/stock/biv#NYSE">BIV</a>).

	&nbsp;

	Vanguard also announced lower fees on its mega-cap style ETFs. The Vanguard Mega Cap ETF (NYSE: <a class="ticker" href="/stock/mgc#NYSE">MGC</a>) and the Vanguard Mega Cap Value ETF (NYSE: <a class="ticker" href="/stock/mgv#NYSE">MGV</a>) now charge 0.06 percent per year, down from 0.08 percent, while the Vanguard Mega Cap Growth ETF (NYSE: <a class="ticker" href="/stock/mgk#NYSE">MGK</a>) is charging 0.08 percent, down from 0.1 percent.

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Vanguard Is At It Again; Lowers Fees On 21 ETFs

While the overall market tumbled and sold off, a few stocks and ETFs stood to benefit. One way to profit from this trend is betting on bear markets; another one, to place a wage on deflation &ndash; and this is what this article will suggest.
<h3>
	Finding Income Amid Global Price Plunges</h3>

	Falling prices are not necessarily good news, although consumers would think so at first. Investors, however, do recognize the risks involved in deflation. For instance, a long-term fall in financial assets would lead to vicious cycle where businesses and consumers drive prices lower consistently. Some believe this could even lead to a destruction of demand.

	In fact, people at Motif Investing remind that, &ldquo;Japan witnessed such an occurrence in the early 1990s and every bump in the global economic recovery stokes similar fears in investors.&rdquo;

	In this environment, &ldquo;some investors have sought longer-term bonds and related ETFs to lock in a fixed interest rate while stabilizing the relative risk of re-investment. If demand for long-term bonds increases with higher deflationary expectations, so may the prices of long-term bonds and related ETFs.&rdquo;

	Thus, Motif Investing, which constantly looks for &ldquo;trends, ideas and world events that could create an investment opportunity,&rdquo; and then picks 10 to 30 related stocks to build portfolios around, weighing them based on their exposure to the coinciding idea, event or trend, created a <a href="https://www.motifinvesting.com/motifs/deflation">portfolio</a> that provides exposure to ETFs with long-duration US Treasury, municipal and investment-grade corporate bonds.
<h3>
	Allocation &amp; Performance</h3>

	The Deflation motif allocates its assets to three segments: US Treasuries (49.7 percent of assets), US Corporate ETFs (26.5 percent) and US Municipal ETFs (23.9 percent). With this strategy, it has managed to outperform the US Bond Index (AGG) both over the past year and past month, delivering growth of 3.2 percent and 0.9 percent, respectively.

	<img alt="" src="https://www.benzinga.com/files/u82070/deflation.png" />

	The three ETFs comprised in the portfolio (and the percentage of assets allocated to each) are:
<ul>
<li>
		Vanguard Extended Duration ETF (NYSE: <a class="ticker" href="/stock/edv#NYSE">EDV</a>), 49.7 percent</li>
<li>
		Vanguard Long Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>), 26.5 percent</li>
<li>
		PowerShares National AMT-Free Municipal Bond Portfolio (NYSE: <a class="ticker" href="/stock/pza#NYSE">PZA</a>), 23.9 percent</li>
</ul>

PowerShares Insured Municipal Bond Portfolio

3 ETFs To Profit From Deflation

Not surprisingly, Vanguard, the third-largest U.S. ETF sponsor, has something to say about the ongoing 2012 ETF fee battle. Pennsylvania-based, known for being one of the ETF industry's low-cost leaders, announced fee reductions for 11 of its ETFs. The fee reductions took effect last week, <a href="https://advisors.vanguard.com/VGApp/iip/site/advisor/researchcommentary/article/IWE_NewsDec2012ExpenseRatio">according to a statement issued by Vanguard</a>.

The 11 Vanguard ETFs that are now home to lower fees include the Vanguard Intermediate-Term Corporate Bond (NASDAQ: <a class="ticker" href="/stock/vcit#NASDAQ">VCIT</a>), which now has an expense ratio of 0.12 percent down from 0.14 percent. The Vanguard Intermediate-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vgit#NASDAQ">VGIT</a>), the Vanguard Long-Term Corporate Bond ETF (NASDAQ: <a class="ticker" href="/stock/vclt#NASDAQ">VCLT</a>) and the Vanguard Long-Term Government Bond ETF (NASDAQ: <a class="ticker" href="/stock/vglt#NASDAQ">VGLT</a>) also saw fee reductions to 0.12 percent per year from 0.14 percent.

Other fee reductions include the Vanguard Mortgage-Backed Securities Index ETF (NASDAQ: <a class="ticker" href="/stock/vmbs#NASDAQ">VMBS</a>) going to 0.12 percent from 0.15 percent. The Vanguard Russell 1000 Value Index ETF (NASDAQ: <a class="ticker" href="/stock/vonv#NASDAQ">VONV</a>) now charges 0.15 percent down from 0.16 percent while the Vanguard Russell 2000 Index ETF (NASDAQ: <a class="ticker" href="/stock/vtwo#NASDAQ">VTWO</a>) saw its fees reduced to 0.21 percent from 0.22 percent.

Vanguard lowered fees on another small-cap ETF, taking the expense ratio on the Vanguard Russell 2000 Value Index ETF (NASDAQ: <a class="ticker" href="/stock/vtwv#NASDAQ">VTWV</a>) to 0.32 percent per year from 0.33 percent. The Vanguard Russell 3000 Index ETF (NASDAQ: <a class="ticker" href="/stock/vthr#NASDAQ">VTHR</a>) is now charging 0.15 percent down from 0.16 percent.

The Vanguard Short-Term Corp Bond Index ETF (NASDAQ: VSCH) and the Vanguard Short-Term Government Bond Index ETF (NASDAQ: <a class="ticker" href="/stock/vgsh#NASDAQ">VGSH</a>) both saw fee cuts to 0.12 percent per year from 0.14 percent.

Over the past year, a broad swath of ETF issuers have lowered fees in an effort to attract fresh capital from investors. Vanguard's most recent fee-cut announcement is by no means the firm's first and issuers such as Charles Schwab (NYSE: <a class="ticker" href="/stock/schw#NYSE">SCHW</a>) and State Street's (NYSE: <a class="ticker" href="/stock/stt#NYSE">STT</a>) State Street Global Advisors (SSgA) have announced fee reductions of their own. SSgA is the second-largest U.S. ETF sponsor.

BlackRock's (NYSE: <a class="ticker" href="/stock/blk#NYSE">BLK</a>) iShares, the world's largest ETF issuer and the firm often viewed as Vanguard's primary rival, announced fee cuts of its own earlier this year. In late November, Invesco's (NYSE: <a class="ticker" href="/stock/ivz#NYSE">IVZ</a>) PowerShares unit, the fourth-largest U.S. ETF sponsor, <a href="http://www.benzinga.com/news/12/11/3128183/powershares-fires-its-own-shot-in-etf-fee-war">signaled it would not be left out of the fee war</a> by announcing lower fees on six of its ETFs.

For its part, Vanguard's fee cuts may not be a direct response to what rival firms are doing, but rather the result of the firm's corporate structure and its ability to drive cost savings through economies of scale.

"Other investment firms may lower costs as a business strategy to attract assets," the firm said in the statement. "For Vanguard, our unique client-owned corporate structure is what drives the low costs of our funds. Since we are a mutually owned firm, low costs are an outcome that is directly tied to how much it costs us to manage our funds. Economies of scale and a focus on keeping operating costs low have resulted in a long track record of Vanguard lowering costs across the board."

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

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Vanguard Fires 1 More Shot in 2012 ETF Fee War

<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
<div class="posttitle" style="margin: 0px; padding: 0px;"><a href="http://portfolioist.com/2011/03/28/relax-arguments-for-doing-less-with-your-investments/">Doing Less With Your Investments</a> March 28, 2011 by <a href="http://portfolioist.com/author/nanettebyrnes/">Nanette Byrnes</a></div>
<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
 
In his latest<a href="http://www.behaviorgap.com/"> Behavior Gap</a> Newsletter, Carl Richards nails that feeling of confusion that comes when we learn first hand that “past performance is not a guarantee of future results.”
<a href="http://smarterinvesting.files.wordpress.com/2011/03/carlrichards-hot-funds1-591x456.jpg"><img src="http://smarterinvesting.files.wordpress.com/2011/03/carlrichards-hot-funds1-591x456.jpg?w=500&amp;h=385" alt="" /></a>
Investing isn't like hiring a basketball coach, Richards argues, but rather like planting an oak tree:“You never plant a tree and then pull it out every time the wind blows just to check the roots.”
He also quotes this gem from Warren Buffett: “Benign neglect, bordering on sloth, remains the hallmark of our investment process.”
<h3 style="margin: 2em 0px 0px; padding: 0px; font-family: Helvetica,Verdana,Arial,sans-serif; font-size: 1.2em; font-weight: bold; color: #333333;">Why We Should Do Less With our Investments</h3>
In his book <a href="http://www.amazon.com/Investing-Simpler-Second-Focus-Investor/dp/0976657457">Wise Investing Made Simpler</a> Larry Swedroe makes a similar point using a study conducted by a trio of academics. Edwin J. Elton and Martin J. Gruber of New York University, and Christopher R. Blake of Fordham University, examined 43 401(k) plans from 1994 through 1999.
Over those five years, the 401(k) plans added 215 new fund options for participants and dropped 45 funds from their plans. The funds added had a strong track record. Those that were dropped had poor recent performance.
The professors soon discovered that the new funds promptly underperformed those that had been given the heave-ho.
That brought the overall quality of the offerings down. Making matters worse, participants in the plans constantly chased performance by shifting money into last quarter's top performers, the study notes.
<h3 style="margin: 2em 0px 0px; padding: 0px; font-family: Helvetica,Verdana,Arial,sans-serif; font-size: 1.2em; font-weight: bold; color: #333333;">Give Your Money A Chance To Grow</h3>
The argument Richards, Swedroe, and others make is simple. Having put thought and effort into setting up their investments, investors need to give them a chance to grow. That doesn't mean you can't appreciate their beauty and even check in on their performance now and again, but successful long-term investing requires patience.
If you have ideas for setting the right balance between enlightened remove and dangerous neglect, <a href="http://portfolioist.com/2011/03/28/relax-arguments-for-doing-less-with-your-investments/">chime in</a>.
 
 
Symbols:<a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol= SPY&amp;count=001'> SPY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0099'>VTI</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00107'>IYR</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00104'>VNQ</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0088'>ICF</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00141'>AGG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BND&amp;count=00151'>BND</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0098'>DBC</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0048'>IVV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IYY&amp;count=0040'>IYY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IWV&amp;count=0045'>IWV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VV&amp;count=0040'>VV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DLN&amp;count=0042'>DLN</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0044'>RSP</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0040'>SCHX</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=CLY&amp;count=006'>CLY</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0067'>LQD</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=BLV&amp;count=0010'>BLV</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=008'>VCLT</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol= DGL&amp;count=001'> DGL</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=IAU&amp;count=004'>IAU</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=DBG&amp;count=003'>DBG</a>, <a href ='http://www.myplaniq.com/LTISystem/f401k_symbols.action?symbol=AGOL&amp;count=003'>AGOL</a>
<div class="sidebar_box_content">(SPY), (VTI), (IYR), (VNQ), (ICF), (AGG), (BND), (DBC), (IVV), (IYY), (IWV), (VV), (DLN), (RSP), (SCHX), (CLY), (LQD), (BLV), (VCLT),  (DGL), (IAU), (DBG), (AGOL)</div>
 
 
</div>
 
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AGOL

PowerShares DBmmodity Index Optimum Yield Diversified Fund

iShares Trusthen & Steers Realty Majors Index Fund

iShares Trust Dow Jones US Real Estate Fund Index

Rydex ETF Trust Rydex S&P Equal Weight ETF

SCHX

Relax: Doing Less With Your Investments

<a href="http://portfolioist.com/2011/03/25/will-harry-brownes-permanent-portfolio-continue-to-work/">Portfolioist Article </a>March 25, 2011 by <a href="http://portfolioist.com/author/geoffc1/">Geoff Considine</a>
<div class="entry" style="margin: 0px; padding: 0px; overflow: hidden;">
I just published an article over at Advisor Perspectives that is titled <a href="http://www.advisorperspectives.com/newsletters11/What_Investors_Should_Fear_in_the_Permanent_Portfolio.php">“What Investors Should Fear in The Permanent Portfolio”</a> that looks at a very simple model portfolio proposed by Harry Browne.  This portfolio contains equal allocations to four elements: stocks, gold, long-term government bonds and cash.  Back in 1998 when Browne first proposed this portfolio in his book, <a href="http://www.amazon.com/Fail-Safe-Investing-Lifelong-Financial-Security/dp/031226321X/ref=sr_1_1">Fail Safe Investing</a>, it was decidedly harder to create your own version of this allocation model.  Today, you can easily implement this portfolio at fairly low cost using four ETFs. 
Harry Browne's <a href="http://portfolioist.com/2010/08/27/bernstein-bogleheads-and-the-permanent-portfolio/">Permanent Portfolio</a> has gotten a great deal of attention–and many new advocates–due to its solid performance in recent years when more traditional asset allocations suffered substantial losses.  However, the question that investors need to ask is whether this will be a successful way to invest in the future. 
I am not going to go through all of the analysis–but I will present three brief highlights here: 1) There is no question that the simple asset allocation in the Permanent Portfolio has done very well in the last decade and more.
2) The reliance on long-term bonds and gold has led to great performance but yields on long bonds are near historic lows and gold is near historic highs.
3) The Permanent Portfolio is not likely to fare well in a rising interest rate environment.
Ultimately, my conclusion is quite similar to that reached by William Bernstein, when he looked at this deceptively simple asset allocation.  The statistics suggest that the Permanent Portfolio does indeed capture elements that will do well in a wide variety of market conditions.  The danger for investors is piling into this strategy after a period that has been almost optimal for this approach vs. more conventional asset allocations.  For many of the latecomers to the Permanent Portfolio, there is a substantial risk that they are chasing performance and are thus setting themselves up for much lower future returns.
<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol= SPY&amp;count=001'> SPY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VTI&amp;count=0096'>VTI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00105'>IYR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00102'>VNQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0086'>ICF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGG&amp;count=00139'>AGG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BND&amp;count=00149'>BND</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0096'>DBC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IVV&amp;count=0046'>IVV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYY&amp;count=0038'>IYY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IWV&amp;count=0043'>IWV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VV&amp;count=0038'>VV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DLN&amp;count=0040'>DLN</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RSP&amp;count=0042'>RSP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SCHX&amp;count=0038'>SCHX</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CLY&amp;count=004'>CLY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0065'>LQD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BLV&amp;count=008'>BLV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=006'>VCLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol= DGL&amp;count=001'> DGL</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IAU&amp;count=002'>IAU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBG&amp;count=001'>DBG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=AGOL&amp;count=001'>AGOL</a>,
<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">Exchange Symbols:<span class="Apple-style-span" style="border-collapse: separate; color: #000000; font-family: 'Times New Roman'; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: 2; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; font-size: medium;">
<div class="sidebar_box_content">(NYSE: SPY), (NYSE: VTI), (NYSE: IYR), (NYSE: VNQ), (NYSE: ICF), (NYSE: AGG), (NYSE: BND), (NYSE: DBC), (NYSE: IVV), (NYSE: IYY), (NYSE: IWV), (NYSE: VV), (NYSE: DLN), (NYSE: RSP), (NYSE: SCHX), (NYSE: CLY), (NYSE: LQD), (NYSE: BLV), (NYSE:VCLT),  (NYSE: DGL), (NYSE: IAU), (NYSE: DBG), (NYSE: AGOL)</div>


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Will Harry Browne's Permanent Portfolio Continue To Work?

<div>
Coming out of the great recession, governments around the world have adopted  loose monetary policies to prop up the economies. These include U.S. central bank's QE2 (Quantitative Easing act 2) and Euro Zone's bailout of troubling peripheral countries like Greece. The current natural disasters in Japan and other countries can only add more demand for the stimulus. These policies resulted in commodity hoarding, especially in material hungry emerging economies such as China. 
It is critical to have anti-inflation anti-currency devaluation component. In this article, we explore the feasibility of adding commodity exposure to an income producing portfolio. Commodity ETFs are effective tools to cope with the current situations. In a portfolio that is designed to preserve capital for retirement needs. However, because of volatile and somewhat dangerous nature of commodites, one needs to actively manage such a portfolio by adopting tactical asset allocation strategies. 
</div>
<div>Income producing ETFs such as high yield stock ETFs and bond ETFs can be used to build a lower risk portfolio for retirement income producing purpose. We study the two plans: one is without commodity exposure and the other one with the exposure. </div>
<a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=5,635">Retirement Income ETFs with Commodities</a> plan is an extension to <a href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=4,904">Retirement Income ETFs</a>: adding extra commodity asset class with PowerShares DB Commodity Index (DBC) and GreenHaven Continuous Commodity (GCC). This plan consists of 37 funds. These funds enable investors to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, Emerging Market Equity, REITs, Fixed Income. Compared with <a href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=4,904">Retirement Income ETFs</a>, this plan has two additional ETFs that represent the extra commodity asset class.  
The following is the list of the candidate ETFs in the <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_view.action?ID=5,635">Retirement Income ETFs with Commodities</a>: 
 
<table style="width: 100%;" border="0" cellspacing="20px">
<thead>
<tr>
<th width="45%" align="left">The list of minor asset classes covered by Retirement Income ETFs with Commodities</th>
</tr>
</thead>
<tbody>
<tr>
<td width="45%" valign="top">Commodities Broad Basket: DBC, GCC Diversified Emerging Mkts: EEM, VWO, DEM Emerging Markets Bond: EMB, PCY Foreign Large Value: PID, IDV Global Real Estate: RWX High Yield Bond: HYG Inflation-protected Bond: TIP Intermediate Government: IEI Intermediate-term Bond: CIU, CORP, MBB Large Blend: VIG Large Value: DVY, SDY, VYM, FVD Long Government: IEF, TLT Long-term Bond: LQD, VCLT Mid-cap Value: PEY Miscellaneous Sector: PFF Muni National Long: MUB Muni Short: SHM Real Estate: IYR, ICF, VNQ Short Government: SHY Short-term Bond: CSJ, VCSH World Bond: BWX, WIP </td>
</tr>
</tbody>
</table>
 
As of Mar 24, 2011, Retirement Income ETFs with Commodities investment choice is rated as and Retirement Income ETFs investment choice is rated as average based on MyPlanIQ <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/f401k_showplanscorelist.action">Plan Rating methodology </a> that was designed to measure how effective a plan's available investment funds are.  It has the following detailed ratings:
 
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies (<a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=771">SAA </a>and <a rel="nofollow" href="http://www.myplaniq.com/LTISystem/jsp/strategy/View.action?ID=1003">TAA </a>, both provided by MyPlanIQ). 
Performance chart (as of Mar 24, 2011)
<a rel="lightbox" href="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=32390,32391,22062,22065&amp;compareID=4,904"> <img src="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=32390,32391,22062,22065&amp;compareID=4,904" /> </a>
Performance table (as of Mar 24, 2011)
<div id="show_Port_div" style="display: block;">
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR</th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
<tbody>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,390"> Retirement Income ETFs with Commodities Tactical Asset Allocation Moderate</a></td>
<td>10%</td>
<td>79%</td>
<td>8%</td>
<td>68%</td>
<td>11%</td>
<td>83%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,391"> Retirement Income ETFs with Commodities Strategic Asset Allocation Moderate</a></td>
<td>11%</td>
<td>97%</td>
<td>1%</td>
<td>4%</td>
<td>4%</td>
<td>20%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,062"> Retirement Income ETFs Tactical Asset Allocation Moderate</a></td>
<td>7%</td>
<td>40%</td>
<td>8%</td>
<td>65%</td>
<td>10%</td>
<td>62%</td>
</tr>
<tr>
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,065"> Retirement Income ETFs Strategic Asset Allocation Moderate</a></td>
<td>11%</td>
<td>69%</td>
<td>3%</td>
<td>14%</td>
<td>5%</td>
<td>17%</td>
</tr>
</tbody>
</table>
</div>
Discussions:
1. Commodity ETFs are volatile. In fact, PowerShare DB Commodity Index ETF (DBC) lost 32% in 2008 while iShares S&amp;P GSCI Commodity Index (GSG) lost a whopping 46% in the same year. 
2. Simply adding commodity ETFs to a strategic asset allocation portfolio (buy and hold with regular rebalancing) did not improve the returns in the past five years. This is again due to the big loss incurred in commodtiy ETFs. 
3. Adding commodity ETFs as fund candidates in a tactical asset allocation portfolio, however, can improve returns. In the past five years, <a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=32,390">Retirement Income ETFs with Commodities Tactical Asset Allocation Moderate</a> had extra 1% annualized return over <a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=22,062">Retirement Income ETFs Tactical Asset Allocation Moderate</a>. 
In conclusions. commodity ETFs are effective tools to cope with the current situations. In a portfolio that is designed to preserve capital for retirement needs. However, because of volatile and somewhat dangerous nature of commodites, one needs to actively manage such a portfolio by adopting tactical asset allocation strategies. 
 Disclosure: 
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols:<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DBC&amp;count=0094'>DBC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GCC&amp;count=002'>GCC</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=GSG&amp;count=0076'>GSG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EEM&amp;count=00107'>EEM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VWO&amp;count=00107'>VWO</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=DEM&amp;count=0013'>DEM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=EMB&amp;count=0033'>EMB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PCY&amp;count=0031'>PCY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PID&amp;count=0023'>PID</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IDV&amp;count=0011'>IDV</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=RWX&amp;count=0030'>RWX</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=HYG&amp;count=0096'>HYG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=TIP&amp;count=0028'>TIP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=WIP&amp;count=0020'>WIP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IEI&amp;count=0016'>IEI</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CIU&amp;count=00104'>CIU</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CORP&amp;count=002'>CORP</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MBB&amp;count=0074'>MBB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VIG&amp;count=0014'>VIG</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol= DVY&amp;count=001'> DVY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SDY&amp;count=0012'>SDY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VYM&amp;count=0012'>VYM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=FVD&amp;count=0010'>FVD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IEF&amp;count=0083'>IEF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=TLT&amp;count=0083'>TLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=LQD&amp;count=0064'>LQD</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCLT&amp;count=005'>VCLT</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PEY&amp;count=0010'>PEY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=PFF&amp;count=0011'>PFF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=MUB&amp;count=0079'>MUB</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SHM&amp;count=005'>SHM</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=IYR&amp;count=00103'>IYR</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=ICF&amp;count=0084'>ICF</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VNQ&amp;count=00100'>VNQ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=SHY&amp;count=0080'>SHY</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=CSJ&amp;count=0068'>CSJ</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=VCSH&amp;count=008'>VCSH</a>,<a href ='../../../../LTISystem/f401k_symbols.action?symbol=BWX&amp;count=0043'>BWX</a>,
Exchange Tickers: (DBC),(GCC),(GSG),(EEM),(VWO),(DEM),(EMB),(PCY),(PID),(IDV),(RWX),(HYG),(TIP),(WIP),(IEI),(CIU),(CORP),(MBB),(VIG),(DVY),(SDY),(VYM),(FVD),(IEF),(TLT),(LQD),(VCLT),(PEY),(PFF),(MUB),(SHM),(IYR),( ICF),(VNQ),(SHY),(CSJ),(VCSH),(BWX)
 
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iShares Dow Jones Select Dividend Index Fund

iShares JPMorgan USD Emerging Markets Bond Fund

First Trust Value Line Dividend Index Fund ETF

iShares Dow Jones International Select Dividend Income Fund

iShares Trust Barclays 7-10 Year Treasury Bond Fund

iShares S&P National AMT-Free Municipal Bond Fund

PowerShares Emerging Markets Sovereign  Portfolio

iShares S&P US Preferred Stock Index Fund

PowerShares ETF Trust International Dividend Achievers Portfolio

iShares Trust Barclays 1-3 Year Treasury Bond Fund

iShares Trust Barclays 20+ Year Treasury Bond Fund

SPDR DB International Government Inflation-Protected Bond ETF

Tactically Manage An Income Producing Portfolio With Commodity Exposure

Aging boomers highlight the major retirement crisis as they come to the end of their working careers. They don't have enough money. There is no money to bail out retirement – it's already been spent on salvaging the economy for the working. This is one of the first generations for whom their retirement is based on what they have with little assistance from Social Security. Henceforth, the bleak reality is that this will apply to everybody.
 It is going to be up to the individual to make the most of what they have. We will have to accept less or work longer or achieve better returns from their investments.
 We are exploring a range of different portfolios looking for ideas to help improve returns for retirement investors. We believe that it is vital for the individual to be more involved with their retirement investing to see better results. These articles are intended to help build the foundational understanding that will enable better returns, lower risk and less angst in our lives.
 The Harry Browne Permanent Portfolio has defied conventional thinking with a lazy portfolio of four assets, Cash, Gold, US Equities and Long term treasury bonds. This is a three asset class portfolio with two fixed income assets (50%) of the portfolio with US Equities and Gold -- being a specialized type of commodity.
<ul>
<li>25% in U.S. stocks, to provide a strong return during times of prosperity. For this portion of the portfolio, Browne recommends a basic S&amp;P 500 index fund such as <a href="http://www.google.com/finance?client=ob&amp;q=MUTF:VFINX">VFINX</a> or <a href="http://www.google.com/finance?q=MUTF%3AFSMKX">FSKMX</a>.(VTI, SPY) </li>
<li>25% in long-term U.S. Treasury bonds, which do well during prosperity and during deflation (but which do poorly during other economic cycles).(LQD)</li>
<li>25% in cash in order to hedge against periods of “tight money” or recession. In this case, “cash” means a <a href="http://www.money-rates.com/BasicGuides/MoneyMarket/MMA_versus_MoneyMarketFunds.htm">money-market fund</a>. (Note that our current recession is abnormal because money actually isn't tight — interest rates are very low.)</li>
<li>25% in precious metals (gold, specifically) in order to provide protection during periods of inflation. Browne recommends gold bullion coins.(GLD) </li>
</ul>
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<div class="sidebar_box_noPadding roundHeadingBlue">Annualized Return</div>
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<h3>Name</h3>
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<td width="90" align="center">
<h3>Last 1 Year</h3>
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<h3>Last 3 Years</h3>
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<h3>Last 5 Years</h3>
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<td height="30"><a href="../LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17551&amp;type=4" target="_blank">Harry Browne Permanent Portfolio</a></td>
<td style="text-align: center;" height="30">11%</td>
<td style="text-align: center;" height="30">6%</td>
<td style="text-align: center;" height="30">8%</td>
</tr>
<tr class="vf_odd">
<td height="30"><a href="../LTISystem/jsp/fundcenter/View.action?symbol=vfinx&amp;type=4" target="_blank">VFINX (Vanguard (S&amp;P 500) Index)</a></td>
<td style="text-align: center;" height="30">13%</td>
<td style="text-align: center;" height="30">0%</td>
<td style="text-align: center;" height="30">0%</td>
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<tr class="vf_even">
<td height="30"><a href="../LTISystem/jsp/fundcenter/View.action?symbol=vbinx&amp;type=4" target="_blank">VBINX (Vanguard Balance (60% stocks/40% bonds)</a></td>
<td style="text-align: center;" height="30">10%</td>
<td style="text-align: center;" height="30">2%</td>
<td style="text-align: center;" height="30">2%</td>
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<div class="sidebar_box_heading_white"> Historical Portfolio Chart</div>
<div class="sidebar_box_content"><img src="http://www.myplaniq.com/LTISystem/article_viewchart.action?portfolioID=17551&amp;securityID=1144,91&amp;width=680&amp;height=500&amp;Type=0" alt="" width="595" height="437" /> 
 The first thing to note is that the portfolio is very stable. It has similar properties to a tactical asset allocation in the sense that it resists taking losses very well. Just about every lazy portfolio has the same unpleasant V in the 2009 timeframe and the Browne permanent is about the only one that avoids this. The combination of gold, cash, long term treasury and US equities turned out to be the perfect hedge against the downturn. 
 And even after the downturn, gold and US equities have performed very well even until today where Gold and US are second and third on the rank of major asset classes.
 We now compare the returns of the original portfolio compared with the same funds being deployed with strategic and tactical asset allocation strateties. 
<ul>
<li>SAA keeps all the funds in the portfolio but moves assets between cash and treasury bonds -- so that the fixed income may all be treasury bonds or equally split with cash or all cash.</li>
<li>TAA will do the same as SAA but can also move all the risk assets into cash or bonds</li>
</ul>

<div id="show_Port_div" style="display: block;">
<h3>Portfolio Performance Comparison</h3>
<table id="comparetablePort" class="tablesorter" style="width: 100%;" border="0" cellspacing="1" cellpadding="0">
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<thead>
<tr>
<th class="header" width="40%">Portfolio Name</th>
<th class="header" width="10%">1Yr AR</th>
<th class="header" width="10%">1Yr Sharpe</th>
<th class="header" width="10%">3Yr AR</th>
<th class="header" width="10%">3Yr Sharpe</th>
<th class="header" width="10%">5Yr AR </th>
<th class="header" width="10%">5Yr Sharpe</th>
</tr>
</thead>
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<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17551">Harry Browne Permanent Portfolio</a></td>
<td>11%</td>
<td>168%</td>
<td>6%</td>
<td>61%</td>
<td>8%</td>
<td>81%</td>
</tr>
<tr class="odd">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17707">Harry Browne Permanent Portfolio Plan Strategic Asset Allocation Moderate</a></td>
<td>12%</td>
<td>164%</td>
<td>7%</td>
<td>56%</td>
<td>9%</td>
<td>76%</td>
</tr>
<tr class="even">
<td><a href="http://www.myplaniq.com/LTISystem/jsp/portfolio/ViewPortfolio.action?ID=17701">Harry Browne Permanent Portfolio Plan Tactical Asset Allocation Moderate</a></td>
<td>10%</td>
<td>140%</td>
<td>2%</td>
<td>20%</td>
<td>5%</td>
<td>50%</td>
</tr>
</tbody>
</table>
</div>
 We would expect the Tactical Asset Allocation strategy to struggle. With only three asset classes, there is nowhere to hide in terms of hedging and doesn't do well until the last couple of months when it catches up with the original. Both the SAA and TAA portfolios only have 40% in fixed income as opposed to the original that has 50% so the SAA and TAA are more aggressively positioned in risk equities.
 In the middle of 2010 when US equities corrected, the SAA dropped significantly while the TAA and Browne original plans use different approaches to minimize downside. As we entered 2011, the fixed long term treasuries weighed on the Browne Original where TAA and SAA rotated them out into cash and let the risk assets pull them up.
 Despite this, the Browne portfolio charts an uncannily even path through volatile waters and delivers reasonable returns with little effort and volatility. We can see benefits from being able to rotate subclasses in but at the cost of some volatility and extra trading that some would think unwelcome.
 In a future article we will add consider adding an extra asset class to see if that would enable us to get better returns without sacrificing volatilty.
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Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Symbols (NYSE: SPY), (NYSE: VTI), (NYSE: IYR), (NYSE: VNQ), (NYSE: ICF), (NYSE: AGG), (NYSE: BND), (NYSE: DBC), (NYSE: IVV), (NYSE: IYY), (NYSE: IWV), (NYSE: VV), (NYSE: DLN), (NYSE: RSP), (NYSE: SCHX), (NYSE: CLY), (NYSE: LQD), (NYSE: BLV), (NYSE:VCLT),  (NYSE: DGL), (NYSE: IAU), (NYSE: DBG), (NYSE: AGOL)
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Gold, US Equities, Long Term Treasuries and Cash Make For an Uncanny Portfolio

I have written recently about the ETF Scorecard at Alert HQ Premium (the free preview is still available, so check it out). This report ranks over 300 ETFs according to how strong their trends are. To complete the ETF picture, I have created two reports that shows how the rankings have changed week-over-week. I offer you the <a href="http://trade-radar.com/AlertHQ/etftrendperformance.html">ETF Trend Performance report</a> and the <a href="http://trade-radar.com/AlertHQ/etfpriceperformance.html">ETF Price Performance report</a>.
Let's take a look at the ETF Trend Performance report. The ETF with the worst performance this past week is the iShares Lehman 20 Year Treasury Bond Fund (TLT). This ETF's ranking fell by 3 points. Given that the maximum score is only 6 points, this was a significant drop, indeed.
Also at the bottom of the performance rankings this week there is the Vanguard Long-Term Government Bond ETF (VGLT), score down by 2.75 points, and the Vanguard Long-Term Corporate Bond ETF (VCLT)  and iShares GS iBoxx Investment Grade Corporate Bond Fund (LQD), both down 2.5 points. 
Looking at the ETF Price Performance report, the bond funds weren't quite the worst performers based on the percent change in price this week but they were certainly down there in the lower end of the report.
One of the better performers this week was the ProShares UltraShort Lehman 20+ Year Treasury (TBT) which was up over 7% over the course of this last week.
Conclusion --
There has been a significant change in trend in the bond ETFs. With the filtering on the trend indicators and the moving averages, the fact that the scores changed so drastically in one week suggest that we have an abrupt reversal in progress.
If this bond rally was actually a bubble and that bubble has burst, TBT could sure be the way to go. And you might also want to take a look at the ProShares UltraShort Lehman 7-10 Year Treasury (PST). Both of these ETFs 
Disclosure: no positions 
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ProShares UltraShort Lehman 7-10 Year Treasury

ProShares UltraShort Lehman 20+ Year Treasury

Has the bond bubble burst? ETF trending provides a clue

PIMCO introduced two new ETFs on September 21, 2010: PIMCO Build America Bond Strategy Fund (BABZ), the first actively-managed BABs ETF, and PIMCO Investment Grade Corporate Bond Index Fund (CORP).  The new listings boost PIMCO's ETF offerings to twelve, consisting of four <a href="http://investwithanedge.com/category/actively-managed-etfs" target="_blank">actively-managed</a> and eight indexed funds.
PIMCO Build America Bond Strategy Fund (BABZ) is an actively-managed ETF targeting taxable municipal bonds issued as part of the Build America Bonds (BABs) program.  It will attempt to capture attractive yield opportunities in this segment while avoiding securities from municipalities that PIMCO believes face deteriorating credit quality. The fund is managed by John Cummings, executive vice president and head of PIMCO's municipal bond desk.
The expense ratio is capped at 0.45%.  The <a href="http://www.pimcoetfs.com/FundInfo/Pages/BABZ.aspx?WT.svl=FundListingHomePage" target="_blank">BABZ snapshot</a> page currently does not have much data but will eventually provide information on maturity, duration, yield, and holdings.  Additional information can be found in the <a href="http://www.pimcoetfs.com/FundInfo/Documents/BABZ_PIMCO_Build_America_Bond_Strategy_Fund.pdf" target="_blank">BABZ fact sheet</a> (pdf) and <a href="http://www.pimcoetfs.com/Documents/PIMCO_BABZ%20ETF%20QA.PDF" target="_blank">PIMCO's BABs ETF Strategy</a> (pdf) document.
BABZ will compete with <a href="http://investwithanedge.com/three-new-etfs-on-tuesday-mna-mint-bab" target="_blank">PowerShares Build America Bonds</a> (<a class="ticker" href="/stock/bab#">BAB</a>) and <a href="http://investwithanedge.com/babs-build-america-bond-etf-from-spdr" target="_blank">SPDR Nuveen Barclays Build America Bond</a> (<a class="ticker" href="/stock/babs#">BABS</a>), both of which are index based funds with 0.35% expense ratios.
PIMCO Investment Grade Corporate Bond Index Fund (CORP) is technically classified as an index ETF that seeks to track an index of investment grade U.S. corporate debt issues.  However, PIMCO's proprietary optimization process will try to avoid securities the firm believes may be hard to trade or deemed to have the highest risk of credit loss.
The underlying BofA Merrill Lynch US Corporate Index has an average maturity of 10.2 years, a modified duration of 6.5, and consists of 4,204 issues.  Current monthly yield is approximately 5.4%, making the expected distribution yield on CORP to be about 5.2% after subtracting out the 0.20% capped expense ratio.  Additional information can be found on the <a href="http://www.pimcoetfs.com/FundInfo/Pages/CORP.aspx?WT.svl=FundListingHomePage" target="_blank">CORP snapshot</a> page and the <a href="http://www.pimcoetfs.com/FundInfo/Documents/CORP_PIMCO_Investment_Grade_Corporate_Bond_Index_Fund.pdf" target="_blank">CORP fact sheet</a> (pdf).
CORP will face competition from 15 existing investment grade corporate ETFs, most notably from <a href="http://us.ishares.com/product_info/fund/overview/LQD.htm" target="_blank">iShares iBoxx $ Investment Grade Corporate Bond</a> (<a class="ticker" href="/stock/lqd#">LQD</a>), <a href="http://investwithanedge.com/vanguard-launches-new-bond-etfs" target="_blank">Vanguard Intermediate-Term Corporate Bond ETF</a> (<a class="ticker" href="/stock/vcit#">VCIT</a>), and <a href="http://investwithanedge.com/vanguard-launches-new-bond-etfs" target="_blank">Vanguard Long-Term Corporate Bond ETF</a> (<a class="ticker" href="/stock/vclt#">VCLT</a>).
Disclosure covering writer, editor, and publisher:  No positions in any of the securities mentioned.  No positions in any of the companies or ETF sponsors mentioned.  No income, revenue, or other compensation (either directly or indirectly) received from, or on behalf of, any of the companies or ETF sponsors mentioned.
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SPDR Nuveen Barclays Capital Build America Bond ETF

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Vanguard Long-Term Corporate Bond ETF

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