Any good ideas regarding ETFs with low correlation to equity ? My portfolio is 80% equity and I would like to reduce equity exposure using ETFs, Any ideas regarding ETFs that have near 0 correlation to equity? Thanks
You'll want to look at long term bonds like $TLT and gold $GLD for low correlation to equities. Here's a backtest of a equal weighted portfolio of US stocks, long term treasuries and gold from 1978 until now. It's rebalanced annually.
The attached SPY_correlations.csv (semicolon-separated) has 3-year (or less because of lack of data), daily percent change correlations using the QuantDare method with SPY compared with 549 other ETFs created with data as of the close on December 3. http://www.lazyportfolioetf.com/allocation/ has suggestions for different ETF allocations.
Here's another good free one to measure correlations among ETFs https://www.investspy.com/calculator You want to have a low Intra-portfolio correlation (IPC) score to have a diversified portfolio and achieve good risk adjusted returns (sharpe ratio).
This article is from last year but the ETF mix is what is relevant. All Weather Portfolio Vs. 60/40 and Buy and Hold Based on my calculations All Weather is returning sub 10% this year but this serves as a possible model one could consider switching to when a bull market is about to end. The 60-40 portfolio has more risk.