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DENT Dumps US, Bets On Gold

The Dent Tactical ETF (NYSEArca:DENT), an actively managed fund sponsored by AdvisorShares, dumped the last of its U.S. holdings this week and instead focused on gold-rich South Africa, betting that the precious yellow metal will outperform.

The change is part of an ongoing strategy to eliminate exposure to U.S. stocks and focus instead on commodities, particularly precious metals, with a view to also protect investors from a falling dollar. The DENT portfolio now holds nearly 50 percent of its assets in cash equivalents, and the other half is split among commodities-rich country ETFs such asChile,Malaysia,India,Singapore and nowSouth Africa.

"We're a deflation shop," Rodney Johnson, DENT portfolio manager, told IndexUniverse.com in a telephone interview. "We see a lot of risk in the market right now, with no upside here, and we are preparing investors for an environment of falling investments."

WhileU.S. stocks performed strongly in September, Johnson said that another "rollover in stocks" is coming within the next year or two, and the downside risk is far greater than any upside potential.

"It has been made clear that the Federal Reserve will print more dollars and buy more Treasurys ahead," Johnson said. "The Fed is about to become the No. 2 holder of U.S. Treasurys in the world, and could surpassChina soon. It's crazy to have your central bank hold most of your national debt."

He acknowledged that while there are no returns of any significance coming from such a large cash position, the allocation is an effort to keep investors somewhat sidelined given the uncertain economic times.

DENT had outflows of $1.4 million in September, pulling assets down to $23.1 million, according to data compiled by IndexUniverse.com. DENT's price has risen about 2.5 percent year-to-date.

Bethesda, Md.-based AdvisorShares launched DENT in September 2009.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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