Tactical ETF Portfolio Shift Commentary 01/24/2012

The addition of high yield is based on the expectation that 2012 will bring lower returns for fixed income overall and a greater emphasis on yield. Spread sectors, in particular, investment-grade credit and high yield, look attractive given strong corporate fundamentals, low default rates, supportive technicals and our expectation for range-bound Treasury yields. While spread volatility is likely to remain high, even if spreads see modest widening, credit markets can outperform given their yield advantage to Treasuries.