Tactical Portfolio Update – US Sectors
Defensive Duo: Gold & TIPs are the Places to Be
► Increasing risks make defensive stocks and strategies attractive.
► Rising gold prices may heavily support gold mining stocks.
The ETF Radar Tactical portfolio is a model portfolio that invests in five ETFs based on a tactical ETF rankings system. The portfolio trades at the end of each month. The holdings for August include SPDR Gold Shares (GLD), iShares Tips (TIP), SPDR-Energy (XLE), iShares MSCI Japan (EWJ) & iShares Aggregate Bond (AGG). In the midst of the debt talk debacle, lingering economic issues and a not so rosy future; gold prices continue to hit record highs. Investors and traders are looking for safe havens to put their money in. One of the oldest and most used safe havens is gold. In addition, many countries are buying gold in large quantities that is preventing gold prices to drop. The other place to be according to the ranking system is in Treasury Inflation Protected Securities or TIPs. Yields continue to drop in these bonds as prices are taking into account a very weak economy and persistent inflation fears.
Based on the rankings SPDR-Gold Shares (GLD) is the ETF of the month. It tracks the price of gold bullion. It has an expense ratio of 0.40% and an average daily trading volume of 15.9 million shares.
P.S. If you are looking for leveraged gold exposure, see the ProShares Ultra Gold (UGL) or the FactorShares 2x Gold Bull (FSG).
David Cohne, is Senior Advisor, Investment Strategy at ETF Radar. You can reach him directly under davidcohne [at] etfradar.com