Model portfolio - ADRE

We use Bank of New York Emerging Markets 50 ADR index as one of the benchmarks against which we measure performance of the model portfolios. We also use the index as one of the components of the buy-and-hold portfolio, and also of the trend following portfolio.

Bank of New York Emerging Markets 50 ADR index holds American Depository Recepits of large foreign companies. We included it in our protfolio to give us exposure to foreign stocks - this is a double play on a weak dollar, and on economic growth outside of the United States. We already had some exposure to non-US growth and other currencies, since most of the companies in S&P 500 and in Nasdaq-100 earn some of their revenue outside of the United States, but we wanted a more straightforward play on the weak dollar and foreign growth.

For trading and tracking purposes, we will use ADRE - an exchange traded fund that mimics the Bank of New York Emerging Markets 50 ADR index. Here are top ten holdings of the ADRE - it has a pretty heavy exposure to China - so we are getting Chinese play as well.

AMERICA MOVIL, S.A.B                    4.74% 
Brazilian Petroleum Corporation ADR     4.57% 
CHINA LIFE INS CO                       4.04% 
CHINA MOBILE LIMITED                    7.35% 
Companhia Vale do Rio Doce (ADR)        5.07% 
PETROCHINA CO ADS                       4.19% 
Petroleo Brasileiro S.A. (ADR)          5.48% 
POSCO                                   4.74% 
TAIWAN SEMICOND ADS                     4.02% 
Vale Overseas Limited ADR               3.87% 

We invite you to check with us now and then and see how the portfolios are doing. 2008 is shaping up to be a very interesting year.




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