NEW YORK ( ETF Expert) -- The mainstream financial media may have caught a break in 2011. Neither the S&P 500 nor the Dow fell more than 20% from respective highs, meaning that nobody ran with the "Bear Is Back" headline. It follows that the March 2, 2009 lows still represent the start of a bull market uptrend.Not surprisingly, many have chosen to wistfully recollect the 90%-plus, since-inception gains for U.S. stocks. Meanwhile, others wisely remind us that substantial corrections of 10% to 20% occurred in each of the 3 years -- 2009, 2010, 2011. Interestingly enough, there have been a number of cat-skinning ways to achieve admirable profits in the period. The Australian dollar via the CurrencyShares Australian Dollar ( FXA) picked up three-fourths of the SPDR S&P 500 Trust's ( SPY) upside for roughly three-fifths the beta risk. That's a pretty good deal for highly correlated assets in the
Of course, the purpose of portfolio diversification isn't merely to hold investments with disparate amounts of risk. One also endeavors to combine
non-correlating assets. . In other words, what asset(s) can still move forward in an equity bull that does not have a strong positive relationship with the S&P 500, like the Australian dollar, or a strong negative relationship, like U.S. Treasury bonds? The most enigmatic possibility out there may be the Japanese yen via the CurrencyShares Yen Trust ( FXY). Most regard the yen as a safer haven choice. And yet, over the course of the current bull market, SPY (S&P 500 SPDR Trust) and FXY moved in the same direction 70% of the time; FXY also appreciated by 30% in value. Perhaps ironically, the relationship over one year is such that FXY moved in the opposite direction 70% of the time. Equally baffling, there's virtually no relationship (non-correlation) over the last 6 months. Naturally, one can attempt to explain the different periods retroactively. For example, the first leg off the bear market bottom involved asset appreciation alongside the trashing of the U.S. dollar; commodities, foreign equities, small-cap U.S. equities and all foreign currencies thrived. The second leg involved a flight to quality in which large-cap U.S. stocks, the U.S. dollar, U.S. treasuries and the yen were primary beneficiaries. On Thursday, institutional money rushed out of the CurrencyShares Yen Trust ( FXY). A total of $250 million exited the FXY gates on 13 times the normal trading volume. The activity left FXY with roughly two-thirds the net assets under management. Apparently, not everyone is impressed by FXY's long-term track record as a "diversifier," or its current status above both the 50-day moving average and the 200-day moving average. . You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod . You can follow me on Twitter.