Starting off the new year with a few updates to clean up some loose ends. First off, new rebalancing rules - 20% relative threshold rebalancing now for all portfolios. Then, a look at my two asset changes last year: VPU supplementing VNQ and USMV taking some from PFF.
After an anti-climactic Round Two which saw no low(er) beta equity fund emerge with any type of advantage, the search returns, this time with dividend-focused ETFs. Will they make a difference? Does a special allocation to low(er) beta or dividend funds make sense in a RP portfolio?
VPU won the last round in my search for low(er) beta equity funds against PFF and USMV, and now faces off against two more contenders: a consumer staples sector fund (VDC) and a financial industry preferred shares fund (PGF)... And the winner is…it’s complicated.
This one is really an experiment - comparing three equity funds, VPU, PFF and USMV, with somewhat low correlation with the S&P 500. Putting them through their paces to get a sense of whether low(er) beta equity funds may be another arrow in the RP quiver.
In the last installment, we looked at replacing REITs with other common asset classes, but what if we stretch a little farther? Utilities ETFs offer promise at doing all the things people say they want REIT ETFs to do…but better. Again, check out the backtests!
