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Updated Nov. 13, 2010 12:01 a.m. ET

MANY INVESTORS ARE FEELING fairly bullish these days, and so are some managers who use exchange-traded funds to protect their clients from a market disaster. Two such portfolio chiefs that Barron’s spoke with last week see stocks headed higher, but they remain mildly concerned about a possible market hiccup in the near term.

You’ve got to stay vigilant—there are always going to be unforeseen, outlying events that might unexpectedly take a bite out of your returns. But we’re actually fairly optimistic right now, says Mebane Faber, managing director at Cambria Investment Management, an El Segundo, Calif. shop that manages $70 million. Faber and his partner, Eric Richardson, last year wrote The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets. Their book lays out ways of building all-ETF portfolios to emulate strategies used by managers at institutions such as Harvard and Yale. The target allocation is now 30% stocks, 30% bonds, 15% real estate, 15% commodities and 10% currencies. The diversification could help avoid some of the pitfalls that hobbled Harvard and Yale in the last crash, when they had too much in illiquid private-equity investments and far too little in bonds and cash.

Another manager, Rob Stein, who runs the Astor Long/Short ETF Fund (ASTRX), with $25 million under management, also is concerned about a potential short-term downdraft. He’s prepared by using exchange-traded funds to invest heavily in segments such as tech, emerging markets and high-yielding U.S. large caps. He has shorted bonds and other asset classes in the past, although he’s not doing so now. The fund’s parent, Chicago-based Astor Asset Management, which runs $700 million in all, was bought recently by electronic market maker Knight Capital (NITE).

Stine is cautious about the market’s immediate prospects, but bullish about the longer-term outlook. As he puts it, We see some short-term risks in the market, but that will set the stage for more opportunities mid-2011.

THE SPOTLIGHT IS SHINING on three soon-to-be-launched ETFs that intend to buy copper and store it in vaults for investors. They will stand in contrast to funds that invest in copper by buying futures, which can be cumbersome and costly.

You can bet all three teams are working round the clock.