Bethe Portfolio Update: 13 July 2023

Machu Picchu

In addition to updating the Bethe portfolio, this account is undergoing significant changes.  Simplification of the holdings is coming with the hopes of reducing portfolio churning while increasing the return/risk ratio.  Numerous limit orders are in place to sell most of the CEFs and as cash becomes available, shares will be purchased from a smaller list of securities.  Follow along as this transition will take place over the coming months and should be complete before the end of this calendar year.

Bethe Investment Quiver and Holdings

Below is the current investment quiver and holdings for the Bethe portfolio.

Bethe Security Recommendations

I’m seeking the top ranked securities from this list of ETFs.  They are:  ESGV, VTI, VOO, SPY, VEA, VWO, BND, AGG, and SHV.  This lineup is similar to what I’m using with the Bohr portfolio.  No sectors are currently recommended for purchase.

Based on the rank (5th column from the right) the order to fill is:  1) ESGV  2) VOO, and 3) SPY.

Bethe Manual Risk Adjustments

ESGV is oversubscribed so I can pass over that ETF.  VOO at 20 shares nearly matches the 21 recommended so I move on to SPY.  Nineteen (19) shares are recommended, but there is insufficient cash to reach 19 shares so I’m holding 7 shares.  These seven were purchased just this morning.

Bethe Performance Data

After 18.5 months of operation the Bethe just recently managed to pass SPY, our benchmark.  I call it a tie at this point as the lead will most likely flip back and forth.

Bethe Risk Ratios

Even though Bethe currently holds a slight lead over the benchmark, the Jensen Alpha value is negative as the short-term interest rate is a rather high 2.65%.  A portfolio beta of 0.86 also places downward pressure on the Jensen value.

It will take a few months to turn the slope of the Jensen from negative to positive.  This is one of the goals for the Bethe over the next six to eight months.