Published in Barron’s, quotes Michael Venuto
Toroso Investments, a New York-based portfolio manager, employs a strategy for building income-focused barbells with ETFs. It seeks ETFs with both low volatility and high yield. On one side, Toroso has been using ETFs such as Guggenheim Enhanced Short Duration (GSY), which has an effective duration of just a few months and a yield near 1%. On the other, Toroso has employed the PowerShares CEF Income Composite Portfolio (PCEF), an aggressive fund of funds that owns a diverse basket of income-focused closed-end funds; it boasts a 7.8% yield.
Toroso’s track record is short, but held up through the bond market meltdown of 2013. Its chief investment officer, Michael Venuto, says its moderate risk strategy has returned a total of 8.2%, versus 4.8% for the Agg since late 2012: The aim “is the least amount of risk for the income.”