Wind energy is another potentially important theme and industrials are the largest sector in both PowerShares Global Wind Energy Portfolio ( PWND) and the First Trust ISE Global Wind Energy Index Fund ( FAN).

The funds are heavy in turbine makers like Vestas Wind ( VWDRY) and Gamesa ( GCTAF). Wind could possibly be a more attractive investment than solar, because wind farm building is done at the corporate level, as opposed to trying to sell solar panels to individuals as well as companies.

Water is another big theme within this sector. The PowerShares Water Resources Portfolio ( PHO) allocates 74% to industrials. There isn't enough potable water in the world, and a lot of time and resources are being spent to rectify that.

One last important aspect of the industrial sector is the defense sector. In addition to a lot of money being spent on defense, as cold as it may seem, during certain kinds of stock market panics defense stocks go up. There are two very similar ETFs in this space; iShares DJ US Aerospace and Defense Index Fund ( ITA) and the PowerShares Aerospace and Defense Portfolio ( PPA).

In assembling this group to complete the 16% allocation outlined above, I would allocate 5% each into IGF and ITA. Both are larger cap and could serve as the core portion of the sector weighting. Then, allocate 3% each to FAN and PHO, which tend to be smaller cap.

I would expect the overall mix to be more volatile than owning XLI, but remember, the focus is on the start of the next bull market. If ever there is a time to increase volatility, it's at the start of a bull market. The mix provides exposure to most of the important themes going into the next decade without taking single stock risk.

Lastly, I would define a new bull market to have started when the S&P 500 goes back above its 200-day moving average -- and proves it can stay there.
At the time of publication, Nusbaum was long IGF and PHO personally and/or on behalf of clients, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.

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