NEW YORK ( TheStreet) -- CNBC recently broadcast a show on six ETF portfolios constructed by Jim Lowell from Forbes Magazine, Matt Hougan from Index Universe and Tom Lydon from ETF Trends. The investment themes were diversified global core, global bull, global bear, global sideways market, emerging market and rising inflation.A few days ago, I wrote a blog post deconstructing the global sideways portfolio, noting the exercise is a positive effort that do-it-yourself investors can learn from. In this article, I'll deconstruct the diversified global core portfolio. No portfolio can be perfect. So this portfolio will have plusses and minuses that we can learn from. The diversified global core portfolio consists of: Vanguard FTSE All World Ex-U.S. ( VEU), 30% target weight; iShares Russell 3000 ( IWV), 20%; SPDR S&P China ( GXC), 10%; iShares iBoxx Investment Grade Corporate Bond ( LQD), 10%; Vanguard Total Bond Market Fund ( BND), 10%; SPDR Barclays International Treasury Bond ( BWX), 5%; PowerShares DB Commodity ( DBC), 10%; and PowerShares G-10 Currency Harvest ( DBV), 5%. The asset allocation is 60% in equities, 25% in fixed income, 10% in commodities and 5% in absolute return. The Currency Harvest ETF goes long on the three highest-yielding currencies in the G-10 and shorts the three lowest-yielding currencies. It's billed as an absolute-return vehicle. It's crucial that an investor have the correct asset allocation for his circumstances. The asset allocation for the diversified global core seems very reasonable for this sort of exercise. I'm not a fan of broad-based index funds like the Vanguard FTSE All World Ex-U.S. and the iShares Russell 3000. There are two reasons for this. One is that the correlations are very high. According to ETFreplay.com, the Vanguard FTSE All World Ex-U.S. and the iShares Russell 3000 currently have a 0.92 correlation. One of the complaints from the crash of 2008 was that all correlations went to 1.00, and these two are practically there right now, which means there is almost no diversification benefit between them. The other reason to dislike these funds is that the broadest indexes tend to be heaviest in the least attractive parts of the market. For the Vanguard fund, the largest sector is financials, at 26% of the fund, and Europe is the largest region, at 44%, including 14% in the U.K. The ETF allocates 14% to Japan. Between the headlines out of Europe these days and the fundamental problems in Japan (debt equaling 200% of GDP, among others) the fund owns a lot of things that are very unattractive. It has very little exposure to other, fundamentally healthier investment destinations like Australia, Latin America and Scandinavia.