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Today I sold the iShares MSCI Emerging Markets ETF (EEM) out of my Perfect 5 ETF Portfolio on my JubakAM.com and JugglingWithKnives.com subscription sites.

And today I’m replacing it in that portfolio with the Vanguard Intermediate Term Treasury ETF (VGIT).

Now obviously a Treasury bond ETF isn’t in the same asset class as an emerging markets ETF.

But what I’m looking for–always–in this ETF portfolio is diversification that lends safety to the portfolio. Emerging markets stocks currently have a strong correlation with developed market stocks so this portfolio doesn’t get much (or really any) diversification from adding emerging market stocks to a mix that includes U.S. stocks.

A treasury ETF, at the moment, does offer significant diversification–a negative correlation to the Standard & Poor’s 500 over the last 3 years–so adding this ETF adds safety to the overall portfolio.

It is also likely to add performance. The Vanguard ETF is up 3.97% year to date as of May 31 and 3.77% in the last three months and 2.08% in the last month. With U.S. Treasury bond yields still looking to fall (and bond prices looking to rise) I think that this ETF will continue its recent performance trend.

The risk, obviously, is that the global outlook will strike investors as rosier in the next few months than over the last few and that would lead to bond priced–and the value of this ETF falling. The 10-year U.S. Treasury closed at a yield of 2.12% on Friday, May 31. The 2016 low yield of 2.00% is certainly in play and any increase in worry over growth in the U.S. and global economy could push yields on the 10-year bond below 2% and toward a possible 1.5%. (This ETF yields 2.22% right now and the expense ratio is a low 0.07%.)

I’ve picked a Treasury ETF for safety–I don’t think this is the time to chase yield in the junk bond market, for example. And I’ve picked an intermediate term Treasury fund–that invests in bonds with a maturity of 3 years to ten years–instead of a longer maturity ETF because I get just about the same non-correlation (and thus diversification) from an intermediate term fund as from a long-term fund and historically intermediate-term ETFs have fallen by 8 or more percentage points less than long-term funds in any bond downturn.

Besides adding this ETF to my Perfect 5 ETF Portfolio with a 20% portfolio weighting, I’m also adding it to my Jubak Picks 12-18 month portfolio and to my Volatility portfolio on the JubakAM and JugglingWithKnives sites.

The iShares MSCI Emerging Markets ETF (EEM) that I just sold from my Perfect 5 ETF Portfolio had a 15% weighting in the portfolio. I’m giving the Vanguard Treasury ETF a higher weighting by taking my gold allocation down 5 percentage points to 20%.

After these changes the portfolio looks like this:

Invesco Currency Shares Japanese Yen (FXY) 25% weighting

Utilities Select Sector SPDR ETF (XLU) 25% weighting

SPDR Gold Trust (GLD) 20% weighting

iShares Core S&P 500 ETF (IVV) 10% weighting

Vanguard Intermediate Term Treasury ETF (VGIT) 20% weighting.