Adding Commodity ETF Exposure to High Yield Income Portfolios Can Enhance Returns

Income producing ETFs such as high yield stock ETFs and bond ETFs can be used to build a lower risk portfolio for retirement income producing purpose. Previously, we have shown that such portfolios can be built using strategic asset allocation (SAA) or tactical asset allocation (TAA) strategies in a plan called Retirement Income ETFs. In this article, we explore the feasibility of adding commodity ETFs to such a plan. Retirement Income ETFs with Commodities plan is an extension to Retirement Income ETFs: adding extra commodity asset class with PowerShares DB Commodity Index (DBC) and GreenHaven Continuous Commodity (GCC). This plan consists of 37 funds. These funds enable investors to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, Emerging Market Equity, REITs, Fixed Income. Compared with Retirement Income ETFs, this plan has two additional ETFs that represent the extra commodity asset class. The following is the comparison between... Read more