PZA And VDC

In the municipal bond space, Hougan said he preferred the PowerShares Insured National Municipal Bond (NYSEArca: PZA) over the iShares S&P National AMT-Free Municipal Bond (NYSEArca: MUB).

He said PZA has less exposure to California than does MUB, and also stressed that PZA’s entire portfolio is insured and that its holdings favor revenue bonds over general obligation bonds, which he said have performed better than general obligation bonds over the past few years.

Finally, Hougan said he favored the Vanguard Consumer ETF (NYSEArca: VDC) over the Consumer Select SPDR Fund (NYSEArca: XLP).

Hougan said VDC is more diversified than XLP, holding 108 companies to XLP’s 40 largely multinational names.

“It holds a lot of the things that are in yours and my cupboards; if you want exposure to more domestic consumer staple names, VDC gives you that with the same low cost and same liquidity.”

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