Building a "core"

Claymore Investments, Inc. 15 May, 2010 | 4:34AM

The "core" component of the portfolio is typically geared to more stable, broad based asset classes and themes.

A core equity component may be created using ETFs focused on broad geographic markets like Canada, the U.S., international and emerging markets using ETFs that capture these broad markets. Similarly, investors may prefer to tilt their "core" toward specific strategies -- for example a core could be created to focus on dividends with a Canadian dividend ETF or a global dividend ETF.

A core fixed income portfolio component can be created using ETFs that capture the different bond categories by using ETFs that track a basket of corporate bonds, government bonds, high-yield bonds and/or real-return bonds. Using individual ETFs in each category allows investors to control the specific weight to each category and allows them the ability to rebalance periodically to potentially take advantage of current market trends. Alternatively, investors could choose a single broader bond index that tracks a combination of the various bonds in one portfolio.

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Claymore Investments, Inc.

Claymore Investments, Inc.