The “ETF Professor” over at Benzinga has already constructed his ETF portfolio in advance of winning the now, $640 million jackpot scheduled for drawing tonight. The model portfolio comprises a nice mix representing energy, gold, emerging market, consumer staples, high yield bonds, blah blah blah…
Here’s the verbatim extract courtesy of Benzinga On Line:
Consumer Staples Select Sector SPDR (NYSE: XLP [FREE Stock Trend Analysis]) The Consumer Staples Select Sector SPDR is of course low-beta and almost downright boring in the world of sector ETFs, but just because one has $360 million to play with doesn’t mean that they should be taking on excessive risk. At least one of your new ETF positions should be something for the long-term and something that won’t cause lost sleep at night.
A stake in XLP would make your grandad and Warren Buffett proud. Rounding up a bit, 1 million shares of XLP would run about $34 million, leaving the Mega Millions winner with $325 million, some of which can be devoted to the…
WisdomTree Emerging Markets Equity Income Fund (NYSE: DEM) Of course some of the winnings should go to an emerging markets fund, but we can do better than standard fare such s the Vanguard MSCI Emerging Markets ETF (NYSE: VWO). There’s a lot to like with DEM, including a yield approaching 4% and that the fund is up 12% year-to-date, just be advised Brazil and Taiwan account for over 43% of the fund’s country allocation.
The tech sector has been leading the market higher this year and with Apple being a runaway train let’s allocate 2 million shares to XLK, which costs $60 million. That leaves $209 million for other funds such as the…
Vanguard Value ETF (NYSE: VTV) We considered the Vanguard Dividend Appreciation ETF (NYSE: VIG) for this spot, but VTV has a much lower allocation to staples stocks and is cheaper than VIG. This is another conservative, sleep at night ETF and the meager 0.12% expense ratio means you won’t be getting decked just for the privilege of stashing some of your mega millions winnings here. Financials and health care combine for over 36% of VTV’s weight. One million shares will cost about $57 million, leaving $152 million for ETFs such as the…
iShares Gold Trust (NYSE: IAU) Yes, gold has lost some of its luster over the past month, but if we get more quantitative easing investors won’t want to be caught without some gold exposure. Some experts would argue investors should have 5%-10% of their portfolios in precious metals. Buying 2 million shares of IAU for about $32 million of your $369 million Mega Millions winnings covers a proper gold allocation and leaves you with $120 million.
EGShares Emerging Markets Consumer ETF (NYSE: ECON) Given the size of the jackpot and the mostly conservative nature of the portfolio to this point, one can afford to take some risks. The EGShares Emerging Markets Consumer ETF isn’t overly risky because it does feature a decent weight to staples names and as the emerging markets consumer is validated as an investment theme this ETF will benefit. One million shares should cost $24 million in a day or two.
SPDR S&P Oil & Gas Exploration & Production ETF (NYSE: XOP) At the moment, it’s hard to get excited about oil and gas stocks because they’re leading the market lower, but our Mega Millions portfolio is lacking for energy exposure and XOP will certainly add some beta without excessive weights to