This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Wien Advocates for Emerging Markets, High-Yield Bonds

Byron Wien, vice chairman of Blackstone was on CNBC the other day talking about his idea for a "radical" asset allocation strategy for 2011. Wien has a very long-term and well-respected track record on Wall Street and anyone wanting to implement his radical strategy could do so with exchange-traded products.

Wien advocates 20% into emerging-market equities. This space has, of course, been very popular over the last few years as returns going into the financial crisis were superior to domestic benchmarks and many emerging-market countries have seen faster recoveries than developed markets. I would avoid broad-based funds like iShares MSCI Emerging Market Index Fund (EEM) or the Vanguard Emerging Market Index Fund (VWO) because they take in the good and the bad while at the same time blending away various positive attributes that many of these markets have.

Investors have countless narrower funds to build a very customized exposure. Among the types of choices available with easily understood longer-term catalysts for growth are the EG Shares INDXX India Infrastructure Fund (INXX), the Global X Brazil Consumer Sector ETF (BRAQ) or the iShares MSCI Turkey Index Fund (TUR). A combination of specialized funds would be better than one of the broad-based funds.

Wien also believes that high-yield bonds, targeted at 20%, are attractive. There are two very popular ETFs with the SPDR Barclays Capital High Yield Bond Fund (JNK) and the iShares iBoxx High Yield Corp Bond Fund (HYG). Recently there has been a new actively managed fund in the space with the Advisor Shares Peritus High Yield ETF (HYLD).

JNK has a trailing yield of 8.48%, HYG has a trailing yield 8.39% and the Peritus fund is too new to have any yield information. One other possibility is the SPDR Barclays Capital Convertible Securities ETF (CWB). While the 3.11% trailing yield is less than the others, it does capture price appreciation when this group is in favor. One important note is that with bond ETFs the trailing yield doesn't necessarily give any reliable indication of what to expect. Changes in the bond market will be quickly reflected in these ETFs.

Hedge funds also feature prominently Wien's allocation. While there are plenty of exchange-traded-products that replicate hedge fund strategies, investors need to realize that the emphasis here is on the word "hedge" and none of these funds will be up 300% one year because they shorted subprime mortgages or some other equally heroic trade in the future.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 -0.41%
FB $117.81 -0.21%
GOOG $701.43 0.82%
TSLA $211.53 -4.96%
YHOO $36.94 2.61%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs