There is plenty of downside risk in today's equity markets due to slow global growth. Investors need a "Post-Modern Portfolio Theory" to face it head on, says Chuck Self, portfolio manager for the iSectors Post-MPT Growth ETF (PMPT) .

Launched this past August, the PMPT is an actively managed ETF of ETFs that uses a quantitative investment model designed to improve upon the principles of Modern Portfolio Theory. The strategy uses monthly changes in more than a dozen capital markets and economic factors, including interest rates, money supply, inflation and unemployment rates, as it seeks to maintain an optimal portfolio allocation. To achieve this, PMPT invests in nine low-correlated asset classes, including basic materials, bonds, energy, financials, gold, health care, real estate, technology and utilities.

Right now, Self says, the PMPT is overweight the iShares U.S. Utilities ETF (IDU - Get Report) after it dropped more than 7% in value in recent weeks. Much of this decline is due to concerns that the Federal Reserve is going to increase interest rates soon.

"We do not believe the Fed will raise interest rates this year due to very low inflation," says Self. "Also, there is enough growth to increase demand for utility output. With a 3.7% yield, investors may receive price appreciation while earning an above-average current yield."

The PMPT also holds the iShares U.S. Energy ETF (IYE - Get Report) , saying that the recent price action and proclamations from oil-producing countries is leading to the view that oil demand and supply is close to being in balance.

"As long as we don't go into a recession in the U.S. or globally, which we don't believe will happen, the demand for energy will increase and these stocks will appreciate," says Self.

Self says he is also bullish on the fund's allocations to the ProShares Ultra 20+ Year Treasury ETF (UBT - Get Report) and the Vanguard REIT ETF (VNQ - Get Report) .

"REITs have just recently eclipsed their pre-recession highs and the commercial real estate market is recovering nicely," says Self. "We believe it's going to continue to do so. In the meantime, VNQ offers a 3.25% yield and a diversified way to invest in the commercial real estate market recovery."