Stoddart's model ETF portfolio 2nd October 2012

Good afternoon,
Below is an update of the ETF model portfolio, as of close of US markets 1st October 2012.
I have put the MSCI world for reference, but ideally, this is a multi-strategy fund, that aims for absolute return.
Inception was 2nd July 2012

ASSET CLASS	TICKER	WEIGHTING	PERFORMANCE %
EQUITY	RWL US	0.05	6.22
	SPY US	0.05	5.74
	FXI US	0.02	3.85
	EWY US	0.02	9.97
	EEM US	0.07	6.68
	BRIC LN	0.03	6.16
	VGK US	0.07	6.12
	SX7EEX GY	0.03	13.09
	EWP US	0.01	10.29
	EWI US	0.01	7.54
	EWG US	0.01	8.55
	EWQ US	0.01	4.76
	GDXJ US	0.02	29.64
DEBT	EBMMEX GY	0.05	1.60
	IBGS LN	0.05	3.43
	IBGX LN	0.15	4.41
	EMB US	0.15	5.22
	HYG US	0.15	0.87
	LQD US	0.05	3.30
		PERCENT	6.014
		MSCI WORLD	6.356
		PERFORMANCE	-0.341

The correction in high yield has hurt my portfolio, however, with annualised distributions of 6.3% for HYG and 3.8% for LQD, I will continue to keep these in the fund. There are fears that with rates currently low, there will be a large amount of higher grade companies coming to market, putting even greater pressure on the high yield market. Despite this, I feel global credit markets will improve over the next 12 months, increasing return of the high yield investments.

European equities, I will continue to added to this position. I expect Spain, and in turn Italy, agree on taking support from the EFSF, easing tensions and improving sentiment. Dont get me wrong, the data is UGLY, but this is now priced in. The market needs to avoid looking at Price to Earnings, we know these have taken some rather heavy writedowns and mutliples look expensive. This is not the case. With credit markets set to improve, analysts will start to revise up their forward earnings.

US equities, I'm looking to reduce. After such a strong outperformance and investors rushing for the defensives again, its time to sell into the strength, in favour of higher beta.

Asian equities have seen some mixed results. Malaysia, Indonesia and Thailand have all been strong, whilst China continues to lag. Time to increase the weighting in China.

Junior gold miners, up 30%, and I will still continue to hold. My view on the US$ is that it continues to weaken, as European credit markets defrost. It will also be aided by supply chain distruptions in Africa, causing physical prices to increase. Junior miners is the leveraged play.

I will look to reweight this fund over the next week, inline with the release of the monthly macro note.
Stoddart