Mapping Out Dynamic Portfolio Allocation With ETFs

The MAPS strategy includes several bond positions with the largest being the iShares Core U.S. Aggregate Bond ETF (NYSEArca: AGG).

“However, Standard & Poor’s Investment Advisory Services tilts the strategy toward short-term and high-yield ETFs, favoring taking on more credit- rather than interest-rate risk for its clients,” said S&P.

Additional fixed income positions in the MAPS strategy include the Vanguard Short-Term Bond ETF (NYSEArca: BSV) and the Vanguard Long-Term Bond ETF (NYSEArca: BLV). The strategy favors BSV because the ETF has an average duration of just 2.7% years compared to 14.4 years for BLV, making the former less sensitive to interest rate changes. Both ETFs charge just 0.1% per year, making each cheaper than an average of 88.5% of rival funds, according to Vanguard.

AGG is the ninth-best asset gather among all ETFs this year with inflows of over $2.7 billion. BSV has added $705.5 million in new assets.

iShares S&P 500 Growth ETF


Tom Lydon’s clients own shares of Apple, BLV, BSV EEM and IEMG.