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Go Post-Modern With This New ETF

August 18, 2016 8:44 am
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Go Post-Modern With This New ETF

Modern portfolio theory (MPT) is evolving, and investors can gain exposure to that evolution with a new exchange-traded fund. The iSectors Post-MPT Growth ETF (NASDAQ: PMPT) debuted Wednesday as the first ETF from iSectors, which launched the fund partnership with Virtus Investment Partners (NASDAQ: VRTS).

Post-Modern Portfolio Theory And PMPT

“PMPT is an actively managed ETF based on the firm’s flagship investment model, the iSectors Post-MPT Growth Allocation. PMPT aims to optimize investor return and minimize the downside risk. PMPT seeks to improve upon the principles of Modern Portfolio Theory (MPT) by applying modern research and technology. To achieve this, PMPT invests in nine low-correlated asset classes, including basic materials, bonds, energy, financials, gold, healthcare, real estate, technology and utilities to ensure a high level of diversification,” according to iSectors.

Related Link: These Aren’t Middling Returns With This Mid-Cap ETF

The ETF follows the increasingly popular ETF of ETFs structure as all of PMPT's holdings are other ETFs.


PMPT's largest holdings include the Market Vectors Gold Miners ETF (NYSE: GDX), iShares Barclays 20+ Yr Treas.Bond (ETF) (NASDAQ: TLT) and the Vanguard REIT Index Fund (NYSE: VNQ).

Other holdings in the new ETF include the iShares Dow Jones US Utilities (ETF) (NYSE: IDU) and the iShares Dow Jones US Financial (ETF) (NYSE: IYF).

PMPT “may be invested up to 30 percent at any one time into any single class, with the exception of government bonds, to which the models may allocate up to 50 percent. It remains 100 percent invested at all times,” according to iSectors.

PMPT can invest in leveraged ETFs and currently counts one such fund among its holdings.

“Modern Portfolio Theory assumes that investors are risk averse, markets are efficient and the allocation of an investment portfolio is more important than individual security selection. MPT favors long-term investing, diversification that seeks an asset allocation with the highest return per any given level of risk,” according to ETF Trends.

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