What ETF Is New To Your Portfolios?

August 21, 2015

Rob Stein, CEO of Astor Investment Management; Chicago:

One of note is the ProShares UltraShort 20+ Year Treasury ETF (TBT) , which is an inverse fund. We bought that not too long ago. We think it’s an important one—not because we necessarily have a view that long-term rates are going to go much higher—but more because we wanted to get the duration closer to zero in our portfolio.

Short-term rates are going to go up, but not long-term rates, so we purchased TBT and we do aggressive rebalancing with it in our active income portfolio. It does a great job at managing duration, while allowing us to still pick up yield on some of the other holdings.

We also added the First Trust Energy AlphaDex (FXN | B-53). A lot of people are looking to get into the energy market now after it had a big pullback, but our economic fundamentals told us to get out of energy and materials last year, so we missed the carnage.

Now that our models are seeing signs of bottoming in that sector, we’re getting involved. It’s not a momentum, or a timing trade, it’s fundamental analysis, which got us out last year, and is now telling us there’s opportunity.

But both TBT and FXN are very small positions, less than 5 percent.

Charts courtesy of StockCharts.com

Contact Cinthia Murphy at [email protected].

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