Recommended number of holdings: 3
| Market/Sector | ETF | ETF Ticker | Rank | Sum |
|---|---|---|---|---|
| High Yield Bonds | SPDR Barclays Capital High Yield Bond ETF | JNK | 1 | 21.27 |
| Treasury Notes | iShares Barclays 7-10 Year Treasury Bond Fund | IEF | 2 | 19.77 |
| Emerging Market Bonds | iShares JPMorgan USD Emerging Markets Bond Fund | EMB | 3 | 17.46 |
| Short Term Corporate Bonds | iShares Barclays 1-3 Year Credit Bond Fund | CSJ | 4 | 4.49 |
| International Government Bonds | SPDR Barclays Capital International Treasury Bond ETF | BWX | 5 | 4.08 |
| Short Term Treasuries | iShares Barclays 1-3 Year Treasury Bond Fund | SHY | 6 | 1.49 |
As of: 02/18/12
The bond rotation strategy is a moderately aggressive bond investing strategy. It buys the bond sectors that have performed well recently. Buying momentum has been a rewarding strategy in the past.
This bond investing strategy is a good choice for an aggressive bond portfolio. It is not intended to be a replacement for the core bond allocation of an investor's portfolio, but would be a complementary allocation to enhance returns and add diversification. We think that the best way to use this strategy is to buy the top two or three ETFs each month.
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