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 General Electric ( 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 chronicled earlier , most clients own WisdomTree International Energy Sector Fund ( DKA). 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 ( IYK). 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 Altria ( MO). While its 15% weighting in Procter & Gamble ( PG) 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.