Breech: Inside ETF Asset Allocation

January 09, 2014

Crucially, there were ETFs that permitted us to invest in Japan—the iShares MSCI Japan ETF (EWJ | B-96) or developed Pacific via the iShares MSCI Pacific ex Japan ETF (EPP | A-97) or the eurozone using the iShares MSCI EMU ETF (EZU | A-54).

During the past year, we have further targeted countries within Europe. We now model Germany and the U.K. separately—using the iShares MSCI Germany ETF (EWG | A-97) and the iShares MSCI United Kingdom ETF (EWU | B-88). We also model other country asset classes in Europe, but have not yet made an investment in any of them.

Growing Emerging Markets Granularity

Similar to our parsing the developed world outside of the U.S., within emerging markets, we have wanted in the past few years to avoid exposure to emerging Latin America and emerging Europe.

So, we separated emerging markets into the three regions for which ETFs were available.

We started modeling emerging Asia (EEMA | C-94) separately from Emerging Latin America (EEML | C-95) and Emerging Europe, Middle East and Africa (EEME | C-38) through the following funds:

  • iShares MSCI Emerging Markets Asia ETF (EEMA)
  • iShares MSCI Emerging Markets Latin America ETF (EEML)
  • iShares MSCI Emerging Markets EMEA ETF (EEME)

Additionally, we had started modeling specific countries within emerging markets during the second quarter of last year.

So, using the MSCI South Korea Capped Index and the MSCI Mexico Capped Index in our analysis, we began in the third quarter of 2013 investing in both the iShares MSCI South Korea Capped ETF (EWY | B-97) and the iShares MSCI Mexico Capped ETF (EWW | B-94).


The takeaway is that the increasing availability of more finely focused indexes and ETFs has enabled us at Cougar Global to deliver on our goals with increasing precision with the rollout of new more finely focused funds.

And that’s a good thing, because now we have the tools to help investors access global financial markets more completely and effectively than ever before.

Dr. James Breech founded Cougar Global Investments, a Toronto-based money management firm that uses only ETFs in its top-down global asset allocating strategies. He perfected a downside risk management system since founding Cougar in 1993. Contact Cougar Global at 800-387-3779 or [email protected]. Contact Dr. Breech at [email protected].


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