Church on the Washington State side of the Columbia River.
Franklin is the Sector BPI portfolio up for review this morning and few changes, if any, are recommended as there are no sectors in the buy or over-sold zone. As you recall from the most recent BPI data, several sectors are in the over-bought zone, of which none are current Franklin holdings. The primary decision is what to do with the cash currently held in the Franklin. Recently, I’ve been adding shares of ESGV to the Franklin.
Franklin Sector ETF Recommendations
Below is the investment quiver and holdings in the Franklin. Utilities (VPU) is a hold-over ETF as the Franklin has yet to go through a Buy/Sell BPI cycle. As I mentioned in earlier posts, I have concerns about holding cash in a money market, TIPs, or a short-term treasury while the market moves higher. This scenario is one I completely overlooked when coming up with the Sector BPI model. I am adjusting by investing some of the cash in a broad equity such as ESGV. VTI, VOO, and SPY are also alternatives.
Franklin Performance Data
Over the past 13 months the Franklin holds a slight lead over the AOA benchmark and a tad greater margin over SPY and ESGV. The question remains, will the Sector BPI model be able to compete with the AOA benchmark.
Franklin Risk Ratios
Since moving over from the Dual Momentum™ model to the Sector BPI model the Franklin has moved slightly higher when checking both the Jensen Alpha and Information Ratio data. That is good news and we need to see this trend continue. It will be at least a year before we will know if the sector model of investing is sound.
Buying Guidelines For BPI Model Portfolios: 9 December 2022
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