Author: Kevin Shine, Shine Financial Services
Model: Asset Allocation
As I pass the one year mark since inception, I am very pleased with the risk adjusted returns of my Asset Allocation model. This is a “set it and fine tune it” type of fund of funds. It is meant to be a better balanced fund, not just two asset classes – stocks and bonds.
Right now my Asset Allocation portfolio has seven asset classes. I try to maximize diversification by watching running correlation studies and weigh the assets as market conditions change. Over the past year, I have added some income generating ETFs: S&P US Preferred Stock (NYSE: PFF) and Pimco Corporate Income Fund (NYSE: PCN). I also added exposure to emerging markets small-cap equities by buying SPDR S&P Emerging Markets Small Cap (NYSE: EWX).
I lightened up a little on precious metals, selling a piece of PowerShares DB Precious Metals Fund (NYSE: DBP) and adding to the short US Treasuries position buying more Direxion Daily 30-Yr Trsry Bear 3X (NYSE: TMV).
I am very pleased to see the Master Limited Partnership ETF, JP Morgan Alerian MLP Index ETN (NYSE: AMJ) do so well.
As for my other holdings, iShares Lehman MBS Bond Fund (NYSE: MBB), PowerShares DB Agriculture Fund (NYSE: DBA), WisdomTree Emerging Markets High Dividend Fund (NYSE: DEM), and Morgan Stanley Frontier Emerging Markets Fund (NYSE: FFD), while not all have been stellar performers in the past period, I still believe in their risk-reward contribution to the portfolio.
