You can view real-time holdings and performance of this strategy at: http://stockalicious.com/stock_journal/656
As mentioned in a previous post about the performance of the Leveraged ETF portfolio, I am currently testing a fully diversified portfolio that should perform in any type of market. While the performance may be mute and more of an average, the risk should be a lot less than a pure equity portfolio. The performance is also magnified by the leverage aspect of the portfolio which will increase the total returns, but
may increase the portfolio’s risk.
I put together a portfolio of different ETFs and Mutual Funds and the composition is as follows:
(Name - Ticker Symbol - Allocation)
Direxion S&P 500 Bull 2.5x - DXSLX - 33.74%
ProFunds Ultra International - UNPIX - 12.27%
ProFunds Ultra Emerging Markets - UUPIX - 4.29%
ProShares Ultra Real Estate - URE - 4.91%
PowerShares DB Commodity Index Tracking - DBC - 6.13%
Direxion 10 Year Note Bull 2.5x - DXKLX - 10.74%
ProFunds U.S. Government Plus - GVPIX - 6.13%
Vanguard Convertible Securities Funds - VCVSX - 6.13%
PowerShares Listed Private Equity Portfolio - PSP - 6.13%
iShares Treasury Inflation Protection Index Fund - TIP - 6.13%
Flaherty & Crumrine Preferred Income Opportunities - PFO - 3.37%
The portfolio allocations roughly match that of the Pennsylvania State Employees Retirement System, whose current allocations can be viewed here. This structure manages risk, but also looks to generate outsize returns in any market condition.
The performance of this test portfolio since inception on March 8, 2007 has been -1.28%, while the S&P 500 over that same period of time has declined by 3.65%. For an outperformance of 2.37% over the S&P 500. The chart below shows the since inception return with the blue line representing the suggested portfolio in this post, while the yellow line is the return of the S&P 500.
Click on the chart to see a larger version of it. As you can see from the chart above, the returns of this portfolio have been less volatile against the broad stock market which was hit the hardest on February 27, 2007 when the stock market declined over 4%. Further testing will need to be completed in regards to the stability of the returns and the perceived outperformance. Please look for updates in regards to the performance, I will be posting return updates monthly.
This analysis does not take into account commissions, fees, purchase minimums and taxes. If you should have any questions please feel free to comment on the blog and I would be happy to provide you an answer.
