CTMPR

If you are looking for information on GTAA it’s probably because of a book like The IVY Portfolio or maybe you have heard about the outstanding performance of the Yale and Harvard Endowments over the past years.  On the surface, this looks like the ultimate ETF for managing retirement funds.

Global tactical asset allocation is a fancy way of saying you are involved in all major market sectors on a worldwide basis:  U.S. Stocks, International Stocks, Emerging Market Stocks, U.S. Bonds, Foreign Bonds, Currencies etc.  The key to success with this philosophy has been to be invested in a sector when the trend is up and to move to cash when the sector turns down.  In theory it’s a wonderful system that has provided excellent returns for active managers who have followed the philosophy.   The key will be whether or not the “Investment Philosophy” can translate into a winning ETF strategy.

I eagerly purchased shares of GTAA the very first day of trading because I honestly want someone else to watch the markets for me and get me out of harms way when things go bad.  Only time will tell if this will be the ultimate Retirement ETF……  I am hopeful!

Hopefully this will not be Deja Vu!

The only thing that makes me nervous is that sometimes theory or practices that work for individual managers don’t translate well into ETF strategies.   I had similar high expectations for LSC (S&P Commodity Trends Indicator ETN) when it launched in 2008.  The past track record that was published in an S&P report showed better than 14% annualized returns.  Best of all, this is a long/short commodity strategy that has no correlation to the performance of the stock market.   Well, something has definitely been lost in the implementation because LSC has struggled and I lost interest after the first year.