Manage Your Portfolio For Systematic Risk With This ETF

Share This Article
December 30, 2009 4:45pm ETF BASIC NEWS NYSE:TWM

risk“Given his view that market risk is rising, Ken Kam has chosen a top pick for 2010 that is not necessarily selected in the hope of gains; rather, he chooses a “short” position for its role in hedging


 one’s portfolio. The Marketocracy analyst looks to the ProShares UltraShort Russell 2000 ETF (TWM), which seeks twice the inverse performance of the Russell 2000 index. For example, if the Russell 2000 index falls by 1%, this ETF would expect to rise 2%,” Steven Halpern Reports From Blogging Stocks.

Kam explains, “Systematic risk is rising and has become the big concern for investors — overwhelming most other factors. “In the past, systematic risk was generally ignored because there was little we could do and the emphasis was placed on diversifying away other kinds of risks.

“Now that we have seen that systematic risk can result in the whole market losing half its value, we can’t afford to ignore it anymore.

“All investors, including passive investors, are going to need to actively manage their portfolio for systematic risk — specifically that means managing their exposure to the market and their sector allocations. We are facing systemic risks from which diversification will not offer much downside protection.

“There are going to be times when you don’t want your equity portfolio to be 100% invested in the market, and there are sectors whose prospects have worsened as a result of the financial crisis.

“Investors need to make an effort to find the sectors that will benefit the most from the government’s efforts to stem the crisis.

“Investors should put a small portion of their portfolios in the ProShares UltraShort Russell 2000 ETF to provide some protection from another devastating systemic crash.

See The Full Story: HERE

The investment (TWM) seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Russell 2000 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be inverse to those of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

Chart for UltraShort Russell2000 ProShares (TWM)

The investment (UWM) seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Russell 2000 index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective. The fund is nondiversified.

TOP 10 HOLDINGS (UWM) ( 32.27% OF TOTAL ASSETS)  
 
Company Symbol % Assets
HIGHWOODS PRPTY INC (HIW) 0.19
Human Genome Sciences, Inc. (HGSI) 0.26
MFA FINANCIAL INC. (MFA) 0.19
Palm, Inc. (PALM) 0.2
Perot Systems Corporation N/A 0.22
Polycom, Inc. (PLCM) 0.19
Russell 2000 18/12/09 N/A 10.68
Russell 2000 Swap N/A 19.94
Skyworks Solutions, Inc. (SWKS) 0.19
TUPPERWARE BRANDS CP (TUP) 0.21

Chart for Ultra Russell2000 ProShares (UWM)

Get 10 Trading Lessons FREE Click Here

GET A FREE TREND ANALYSIS FOR ANY ETF HERE!


Read Next



Get Free Updates

Join over 50,000 investors who get the latest news from ETFDailyNews.com!

Most Popular


From Our Partners


Explore More from ETFDailyNews.com

Free Daily Newsletter

Get daily ETF insights from our market experts. Never miss another important market development again!

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories