Why we pulled back from bonds in our Diversified ETF model

by Matthew MacClary|Published September 10, 2012

Author: Matthew MacClary
Covestor model: Diversified ETFs

The Diversified ETFs model reduced the allocation to US long term government bonds from 42% to 18%. This move makes sense because of the downside volatility and flat performance exhibited by this asset class over the summer. US stocks have an allocation in the portfolio similar to last month at about 40%. This equity slice of the portfolio is split between an S&P tracking ETF and a small cap ETF.

Diversification to reduce portfolio volatility and draw down is provided by modest commitments to commodities, short positions in China, gold, and the ProShares UltraShort DJ-UBS Crude Oil fund (SCO).

AUTHOR

Matthew MacClary

My work as a software engineer at a technology corporation helps me to take a methodical approach to my investing. I have run portfolios since college, first focusing on tech and growth stocks, then moving to a Buffet-style value approach before settling on my current quantitative method that allows me to seek strong returns while taking on less risk.

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