Painted Hills – Central Oregon
Despite the small size, the Franklin portfolio receives the same attention as the larger portfolios. The same methods are used to manage this Sector BPI portfolio as with all other sector BPI portfolios. Readers interested in the Sector BPI model will find this Seeking Alpha article of interest. Click on this link and take a look.
Before beginning this blog I checked on the Bullish Percent Indicator data and I see where Technology dropped out of the overbought zone. I think VGT was sold out of several portfolios, but will not know for sure until I update each account. The Franklin does not hold any shares of VGT.
Over the past week or so several sector ETFs were sold leaving the Franklin with 48% in cash.
Franklin Security Holdings
Below is the investment quiver and current holdings for the Franklin. The percentage to invest in each of the sector ETFs is based on a three-year volatility calculation. The sum of the percentages from VAW down through VPU add up to close to 100%.
No sector ETFs are oversold. All overbought sectors already have TSLOs set so there is no action in this review for the eleven sectors. With available cash we look to the three U.S. Equities, VTI, VOO, and ESGV as ETFs to put the cash to work.
Franklin Manual Risk Adjustment
Based on data that comes out of the Kipling spreadsheet, ESGV is the highest ranked ETF of the three U.S. Equity securities. As you can see, 14 shares are recommended and the Franklin currently holds 15. The Franklin does not hold any VTI and five shares are recommended so I have at least one limit order in place to purchase more shares of VTI.
To use up the remaining $7,733 in cash I placed limit orders for ESGV and VOO at prices much lower than current prices. I’m not in a hurry to part with all the cash so I set limit orders between 5% and 10% lower than the current price. If annualized volatility holds true for the year these lower prices will be struck sometime during the year.
Franklin Performance Data
While the Franklin is one of the youngest portfolios, we are beginning to build useful data month by month. Since 12/31/2021 the Franklin has manage to outperform the SPY benchmark as well as all other potential benchmarks. 2024 is going to be a critical year to as we continue to test the Sector BPI investing model. There is an immense amount of political uncertainty facing U.S. Equities and it will be interesting to see how the market deals with all that is before us. Caution is the watch word.
Franklin Risk Ratios
It is much too early in January to pay attention to the last column on the right. If we compare December with November we see improvement. The other trend to follow is the slope of the Jensen Alpha. It is currently a very strong 0.51.
Franklin Portfolio Review: 21 July 2023
Tweaking Sector BPI Plus Model: 20 May 2023
Tweaking Sector BPI Plus Investing Model: Part II
Millikan Sector BPI Update: 20 July 2023
Questions and Comments are always welcome.
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