The UBA is an investing construct used by Merriman and has its roots in the Fama-French 3 factor model, which is very well described on the DFA(dimensional fund advisors) website. Tom is also using a version of this model.
My version:
US - VOO,VTV,VB,VBR
Developed International - VGK,VPL,EFV,VSS,DLS
Emerging markets - VWO,DEM,VSS,DGS
Reit - VNQ,VNQI
Bonds - none
At the time the chart started (10 july 2010) the portfolio was started. Parts of the portfolio I already had in possession, other parts were bought at the time. This is roughly a year after the crash and during the crash I bought all kind of things and it needed a cleanup. Also at the time I needed to pay a rather large bill and decided it was a good time for a total restructure.
So all ETFs are AIMed separately with parameters (10,0,6,5) (BSafe,SSafe,BMin,SMin). So I had a few trades, but you don't see them on the chart.
I use Interactive Brokers, and at the start of the portfolio sold euros and bought dollars. So the portfolio is a dollar portfolio. So I also needed dollars as cash and the interest rate that IB is giving is zero. So using AIM I wanted a higher return for my cash and I could not use a Bank, as I do in the euro area.
So SHY is a candidate to hold cash, because it is stable, and it gives a small return. At the time there was a lot of talk about the permanent portfolio (Clive knows a lot about the PP) and because it is stable it seemed to me usable as a cash proxy, giving a better return. The PP is 25% VTI, 25% IAU, 25% TLT, 25% SHY. In fact it has done so, and as far as I am concerned it can drop 40% and still be a cash proxy.