Jellyfish at Hatfield Science Museum – Newport, Oregon
Looking back eight or nine months ago the Franklin was trailing its benchmark (AOA). Since that time the Franklin has pulled ahead of the benchmark, partially due to moving from the Dual Momentum™ model to the Sector BPI model. Will this trend continue is the cogent question?
If interested in the Sector BPI model, follow the Carson, Franklin, Gauss, and Millikan portfolios.
Franklin Investment Quiver
Below is the investment quiver and current holdings for the Franklin. Checking Bullish Percent Indicator (BPI) graphs this morning, Utilities is over-sold and Energy is right on the border of being over-sold. I plan to add shares to the 10 VPU already in the portfolio and 30 to 35 shares of VDE. The number of shares will be explained in a moment.
How do I come up with the percentage listed under the Strategic or Max AA column. For the eleven sectors I use the three-years annualized volatility for each sector and multiply it by 0.70. This currently pushes VDE up to 27% and VPU to 16%. My preference is to max out any given sector at 25%. Of course this will need to be adjust if the percentage exceeds 100%. Thus far I’ve not been faced with this problem.
Franklin Manual Risk Adjustment
The Manual Risk Adjustments worksheet from the Kipling spreadsheet is what I use to determine the number of shares of a particular sector. Purchasing 30 shares of VDE will move Energy up to 24% of the portfolio. I may push this to 35 shares as Energy can go as high as 27%.
For VPU, 5 more shares will bring Utilities up to 15% or what I prefer for this sector.
Franklin Performance Data
Over the past 13.6 months the Franklin has outperformed the AOA benchmark by nearly two percentage points and the S&P 500 by an even larger margin. This is quite a change from the summer of 2022.
While one always wants to see the IRR in positive territory, we need to remember just how poor an investment period we are recording.
Franklin Risk Ratio
Checking the following risk factors we see the Jensen Alpha or Jensen Performance Index reached its highest value since August of 2022. Since moving over to the Sector BPI model the Franklin now shows a positive Information Ratio.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
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Lowell,
I added VPU and VDE to two portfolios yesterday. May add a 3rd today.
Bob W.
Bob W.
I also added shares of VPU and VDE to the Franklin moments ago.
Lowell
If you missed my Forum post this morning, you may have received notifications for some older blog posts. Here is what happened. I ran a search for portfolios that are no longer being tracked here at ITA. I wanted to delete these posts. The screen caught over 60 posts I wanted to keep. In the process of cleaning up the site, a number of posts ended up in what is called the Edit bin. WordPress does not allow one to restore these posts so i needed to go in and make an edit and repost.
Please excuse this error if you received a number of notifications. I unchecked the notifications box, but that was likely not sufficient.
Lowell
No problem Lowell!
Look at it as an opportunity to refresh basic portfolio and system methods 🙂
I actually looked them up and re-read the entire set. It’s good to do those kinds of reviews from time to time.
Craig,
I unchecked the notification box thinking this would shut down the notifications. Apparently that was not sufficient.
WordPress should have a Restore option when a blog shows up as an edit.
Lowell