ETF Strategists Turn Beta Into Alpha

June 05, 2014

The "Special Opportunities" portfolio from Toronto-based Hahn Investment Stewards reflects the all-ETFs firm's broad top-down macro approach to the investment markets that's central to what ETF strategists seek to deliver.

The broad-as-possible diversification gives investors access to a multi-asset-class approach to global tactical asset allocation by slicing and dicing exposure by region and even particular countries. Apart from asset classes, the portfolio is also diversified across global risk factors. It's designed for a five- to seven-year holding period, during which it's meant to deliver growth and, as the relatively large position in cash equivalents clearly shows, protection against downside risk.

Among the 30 individual ETFs included in the mix are the EGShares Emerging Markets Consumer ETF (ECON | C-41), the large-cap iShares Global 100 ETF (IOO | B-83), the single-country iShares MSCI Turkey ETF (TUR | B-99), the Market Vectors Mortgage REIT Income ETF (MORT | B-93) and the PowerShares Chinese Yuan Dim Sum Bond Portfolio (DSUM | B).

The approach exemplifies what Tyler Mordy, the firm's president and co-CIO, describes as his role as an "insecurity analyst," effectively helping investors play offense by playing thorough defense that canvasses the planet's entire investable universe.

The Special Opportunities strategy had a year-to-date return of 6.07% as of May 12, 2014.

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