For the industrial sector, the client has 8% in the
Rydex Equal Weight S&P Industrial Fund
(RGI) and 3% in the
PowerShares Water Portfolio
(PHO), which results in an equal weight.
I like RGI because many of the sector funds have huge positions in
(GE), which I don't want to own. With PHO, I believe in the water theme as a powerful long-term investment thesis.
Energy is a sector where I want a lot of foreign exposure. As
, most clients own
WisdomTree International Energy Sector Fund
. This particular client has an 8% weight in DKA and 2% in one of the Chinese oil majors for an equal weight in the sector.
For the consumer sector, the one ETF I use is
iShares Dow Jones U.S. Consumer Goods Sector Index Fund
. For this client, it represents 10% of the portfolio, and the rest of the sector is made up of individual stocks.
In this sector, I want mostly domestic exposure, as I feel the brand names are worth owning. While the fund is not perfect, I like the heavier weighting to
. While its 15% weighting in
Procter & Gamble
may not be ideal, the concentration is nowhere near as heavy as a lot of other cap-weighted funds. However, its 1.7% yield is only fair compared to other ETFs in this sector.