Belem Tower – Lisbon, Portugal
Franklin is the Sector BPI Plus portfolio up for review this morning. No changes are anticipated as the three sectors calling for a Buy are already filled. Utilities (VPU) is actually over-subscribed. Cash is limited and I’ll explain what I am doing with that money.
Franklin Investment Quiver and Holdings
Below is the investment quiver and holdings for the Franklin portfolio. In the third column from the left you will see, for example, Discretionary (VDC) is to hold 5.7% of the portfolio. Now move to the second column from the right and you will see that VDC is currently that same percentage (5.7%) of the total portfolio. VHT is slightly over “budget” while VPU is nearly twice the recommended percentage. I don’t plan to sell VPU until the sector reaches the overbought zone.
Franklin Security Recommendations
Since all the sectors calling for a purchase are filled, we look next to equity ETFs such as VTI, SPY, VOO, and ESGV. Of these four securities VOO holds the highest rank (#5) when using the Rank column that is 5th from the right. What I did was to set a limit to purchase one (1) share of VOO at a price well below the current price. That will use up most of the available cash.
I have mild concerns about the federal government shutting down at the end of this month. To counter major damage to capital I have a number of limit orders set within nearly all portfolios. The Copernicus is different in that I don’t plan to sell shares held in that portfolio. I doubt computers will sell shares of Schrodinger so it will ride out any rough patches in the future.
Franklin Manual Risk Adjustments
No changes are planned for the Franklin.
If you have any questions regarding Buy, Hold, or Sell decisions, post them in the comment section provided below.
Franklin Performance Data
The Franklin continues to hold a small lead over SPY when analyzed over the past 20.5 months. The lead is significantly higher when compared with the other five potential benchmarks.
Franklin Risk Ratios
The good news is that the Jensen Alpha moved back into positive territory. The Jensen slope is a generous 1.1 and should hold positive for several months.
Going back to September of 2022, all risk values have improved with exception of the Omega Ratio. This information bodes well for the Sector BPI Plus investing model.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
Franklin Portfolio Review: 21 July 2023
Discover more from ITA Wealth Management
Subscribe to get the latest posts sent to your email.
Hi Lowell,
I have a general question about placing limit orders to exit a position. How far out of the money and what duration do you generally use?
Thank you,
Bill
Bill,
If setting a limit order to purchase I use the default period. Schwab goes out six months.
I generally set the price between 1% and 5% below the current price. Since commissions are now zero, I normally break the purchase into smaller units and set several limit orders for a single ETF.
I’m on the road now, but when I next set up a review I’ll try to remember to lay out some specific numbers. Good questions.
Lowell
Thanks Lowell. Always appreciate your guidance
Bill
I forgot to ask – Do you use the same criteria to sell out of a position?
Thanks
William,
When sector ETFs reach the overbought zone I set 3% TSLOs. For other equity ETFs I generally set TSLOs ranging from 3% to as high as 8%.
Lowell
Thank you