Portfolio Review: Weisbrod Goes Nuclear

June 04, 2008

Manager also buying ETFs focused on natural gas and global infrastructure based on various fundamental, technical factors.


When picking out exchange-traded funds for his clients, André Weisbrod says he likes to keep an eye on the bigger picture.

That means taking into account economic as well as sector trends around the world, according to the chief executive at STAAR Financial Advisors.

"We focus on identifying significant long-term trends in the market and then finding the best ways to take advantage of those opportunities," Weisbrod said. "But we're not trying to pick tops and bottoms. We're definitely not market timers."

Once such a top-down fundamental approach identifies macro changes, or mega-trends as he calls them, Weisbrod uses technical analysis to try to pinpoint when and where to place assets. Those types of momentum indicators include reviewing price charts and tracking volume movements.

He says his aim is to use all of the research tools available to turn ideas into realistic ways to invest in demographic, social and political trends. Besides managing private accounts, Weisbrod's firm serves as advisor for the STAAR family of mutual funds. Those combine mutual funds with exchange-traded funds to build portfolios.

In both client portfolios and his various funds, Weisbrod remains bullish on commodities and natural resources.

"In the short term, parts of the market such as energy have been bid up so high that we could be due for a healthy correction," he said. "But the long-term trend in energy is certainly for prices to go up."

Recently, Weisbrod has been adding to the Market Vectors Nuclear Energy ETF (AMEX: NLR). He first started buying it about two months ago. "It's an energy sector that hasn't flown with the others since nuclear energy has been out of favor until very recently," he said.

France gets 70% of its power from nuclear energy, Weisbrod points out. "The reason is that nuclear energy is practical and the technology has greatly improved to make it safer," he said. "As energy consumption in emerging markets continues to grow, the whole world is increasingly going to turn to nuclear energy."

Weisbrod considers NLR as an extremely overlooked and undervalued fund. "When it takes off, we think it has a huge upside," he said. "If our assumption is correct that energy will continue to go up over time, NLR's a great value right now."

On the opposite end of the return spectrum is First Trust ISE-Revere Natural Gas (NYSE: FCG). It has gained more than 35% this year, similar to other natural resources funds such as the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL).

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