Model ETF Portfolio Versus Benchmark: More Diversification, Similar Returns
The Model Exchange-Traded Fund (ETF) Portfolio is now five years old.
The portfolio’s performance has been very close to that of our benchmark, although we have done somewhat better since we filled out our holdings three years ago.
Figure 1 and Table 1 show the performance of the Model ETF Portfolio through March 31, 2011.
It is worthwhile to note that we have an 18% commitment to real estate while our benchmarks do not. Without
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real estate our returns would have been higher, but I feel that real estate is an essential part of an investment portfolio. It is unfortunate to have a 75% pullback during a short five-year holding period, but real estate’s previous performance, as well as its recovery from its low, support the desirability of its place in a long-term portfolio.
Table 2 on page 36 provides insight into the year-by-year performance of the Model ETF Portfolio and its benchmark.
Change in Review Schedule
Though the Model ETF and Model Mutual Fund Portfolios are kept up to date monthly at AAII.com, a number of members suggested that it would be helpful to cover them more frequently in the AAII Journal. Consequently, we have decided to review both the ETF and mutual fund model portfolios in the AAII Journal four times a year.
To read more, please become an AAII member or CLICK HERE.