Selecting ETFs and Building a Strategic Model Portfolio
Summary
This document sets out criteria for assembling a curated ETF list across equity and bond regions and categories. The stated filters include sufficient fund size, a preference for distributing share classes when dividend yield is used as a valuation measure, excluding leveraged products, generally avoiding currency-hedged funds, and favouring lower ongoing charges. The resulting catalogue includes examples of funds for government, corporate, and high-yield bonds, alongside broad-market, dividend-oriented, and value equity exposure. Some categories have no listed fund.
The model portfolio combines strategic equity and bond weights with regional and within-region allocations. It also describes tactical weighting based on relative momentum and a single intra-asset allocation process using relative dividend yields. To use the model, investors update prices and possibly dividends, compare their holdings with target weights, and consider rebalancing when they diverge substantially. The text does not provide the full portfolio weights, calculation details, or a performance evaluation, and the ETF list and costs may change over time.
Key ideas
- ETF selection considers category coverage, fund size, share class, leverage, currency hedging, and cost.
- The catalogue spans regional equity and bond exposures, with some unavailable categories.
- The model combines strategic asset and regional weights with tactical relative-momentum weighting.
- Relative dividend yields inform allocation within asset classes.
- Portfolio use involves updating inputs, comparing weights, and considering rebalancing.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.