Activity 2: ETFs and Asset Allocation

Please use your long-term portfolio for this activity (if you haven't already created a portfolio for this long-term exercise, go ahead and do so now. Here are instructions on how to create an additional portfolio).

Your goal is to build a portfolio comprised of any weighting of the ETFs below.

Equity ETFs:

  1. EEM (iShares MSCI Emerging Markets)

  2. SPY (SPDR S&P 500)

  3. XLF (Financial Select Sector SPDR)

  4. GDX (VanEck Vectors Gold Miners)

  5. QQQ (Invesco QQQ)

  6. EWZ (iShares MSCI Brazil)

  7. XLU (Utilities Select Sector SPDR)

  8. XLP (Consumer Staples Select Sector SPDR)

  9. XLE (Energy Select Sector SPDR)

  10. XLK (Technology Select Sector SPDR)

  11. XLI (Industrial Select Sector SPDR)

  12. XLV (Health Care Select Sector SPDR)

  13. XRT (SPDR S&P Retail)

  14. KRE (SPDR S&P Regional Banking)

Fixed Income ETFs:

  1. IEF (iShares 7-10 Year Treasury Bond ETF)

  2. AGG (iShares Core US Aggregate Bond ETF)

  3. LQD (iShares iBoxx Investment Grade Corporate Bond ETF)

  4. BSV (Vanguard Short-Term Bond ETF)

  5. EMB (iShares JP Morgan USD Emerging Markets Bond ETF)


  1. You can allocate a percentage of your portfolio to all of the ETFs, 100% to 1 of them, or anything in between.

  2. Use Excel to figure out how many shares of each ETF you need to buy to reach your desired allocation.

During the activity, make sure to think about the following questions, to be discussed in class after completing your portfolio:

  • What is your risk tolerance?

  • What is your strategy?

  • What factors are you considering when making your allocation decision (broadly)?

  • What did you think about when considering the geographic distribution of your allocation? How about when
    choosing stocks vs bonds vs cash? Or government bonds vs corporates?

  • Did you base your decisions on an overarching trend you’ve noticed in the markets?

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