| Portfolio Weightings & ETF Descriptions: |
|
Domestic Stock ETF Holdings:
| 13.33% |
PowerShares FTSE RAFI US 1000 (PRF):
Tracks a fundamentally weighted index that holds the 1,000 largest domestic stocks based on four factors—book value, cash flow, sales, and dividends. Stocks in the portfolio are weighted by their fundamental scores. |
| 13.33% |
Rydex S&P MidCap 400 Pure Value (RFV):
Tracks the “pure value” segment of S&P MidCap 400 index, which holds approximately one third of the index ranked on price-to-book-value, price-earnings, and price-to-sales ratios. |
| 13.33% |
Rydex S&P SmallCap 600 Pure Value (RZV):
Tracks the “pure value” segment of the S&P SmallCap 600 index, which holds approximately one third of the index ranked on price-to-book-value, price-earnings, and price-to-sales ratios. |
| 13.33% |
First Trust Dow Jones Select MicroCap Index (FDM):
Tracks an index constructed from micro-cap stocks based on a combination of value and growth factors. The weighting of each stock is based on a modified market capitalization determined using float rather than total shares. |
Domestic Stock Sector ETF Holdings:
| 13.33% |
iShares Cohen & Steers Realty Majors Index Fund (ICF):
Tracks a modified capitalization-weighted index of large, liquid domestic real estate investment trusts (REITs) that is diversified across property sectors in an attempt to represent the current market. |
| 13.33% |
Alerian MLP ETF (AMLP):
Tracks the modified capitalization-weighted Alerian MLP Infrastructure Index, which consists of master limited partnerships (MLP) and limited liability companies (LLC) that earn the majority of their cash flow from energy commodities, but are not directly exposed to changes in commodity prices. AMLP issues Form-1099 like a regular corporation, and the net asset value (NAV) of fund shares will be reduced by the accrual of any deferred tax liabilities. Therefore, the fund’s NAV performance could differ from the index. |
Foreign Stock ETF Holdings:
| 5% |
Vanguard FTSE All-World ex-US (VEU)
Tracks the float-adjusted capitalization-weighted FTSE All-World ex US Index, which includes approximately 2,220 non-U.S. large- and mid-cap stocks from both the developed and emerging markets. |
| 5% |
SPDR S&P International Small Cap (GWX)
Tracks the float-adjusted capitalization-weighted S&P Developed Ex-U.S. Under USD2 Billion Index, which is constructed of small-cap, publicly traded companies domiciled in developed countries outside the U.S. |
| 5% |
Vanguard Emerging Markets (VWO)
Tracks the float-adjusted capitalization-weighted MSCI Emerging Markets Index, which is designed to provide broad exposure to the equity markets of emerging countries in Europe, Asia, Africa, and Latin America. |
Foreign Stock Sector ETF Holding:
| 5% |
SPDR Dow Jones International Real Estate (RWX)
Tracks the float-adjusted capitalization-weighted Dow Jones Global ex-U.S. Real Estate Securities Index, which holds publicly traded real estate securities in developed and emerging countries excluding the United States. |
Optional ETF Holding:
| |
iShares Barclays 1-3 Year Treasury Bond (SHY):
Use of this ETF should be considered as a way of controlling portfolio risk. The index tracked is capitalization-weighted and includes U.S. Treasury bonds and notes that have a remaining maturity of between one and three years. |
|
A Note on Weightings:
If you are trying to follow this portfolio with your own funds, it is recommended that the First Trust Dow Jones Select MicroCap Index, PowerShares FTSE RAFI US 1000, Rydex S&P Midcap 400 Pure Value, Rydex S&P Smallcap 600 Pure Value, and ALPS Alerian MLP funds be weighted equally.
The weighting of the iShares Cohen & Steers Realty Majors fund can vary based on your exposure to other real estate holdings. Since the Model ETF Portfolio has no other real estate, it was weighted equally in the actual portfolio. These six ETFs each make up 13⅓% of the portfolio. The international ETFs—SDPR S&P Int’l Small Cap, SDPR Dow Jones Int’l Real Estate, Vanguard FTSE All-World Ex-U.S., and Vanguard Emerging Markets—are each weighted 5% of the overall portfolio. The iShares Barclays 1-3 Year Treasury Bond fund should be considered if you are looking for a slight hedge against risk. Since the Model Portfolio is very long-term, the iShares Barclays 1-3 Year Treasury Bond fund was not included in the actual portfolio, but in the future we will show the risk and return effect of holding this exchange-traded fund.
