Franklin Sector BPI Plus Review: 26 April 2023

Quilt

Franklin is the Sector BPI portfolio scheduled for review this morning and each time I update one of these portfolios a new wrinkle comes to the fore.  This review required a special decision since Telecom (VOX) moved into the oversold zone and there was insufficient cash to purchase shares of VOX.  Franklin did hold Utilities (VPU) and it was still in the overbought zone so there was a standing TSLO in place to sell.  My decision as to how I handled this situation is explained below.

Franklin Investment Quiver and Holdings

Here we have the investment quiver for the Franklin including the decision to sell all shares of  VPU before the TSLO kicked in and to use the cash to purchase shares of VOX.  Yesterday, two different limit orders were struck ending up with 30 shares of VOX or 18.1% of the total portfolio.  See the second column from the left.  This leaves Telecom (VOX) three shares shy of the recommended 20% of the total portfolio.  I have a limit order in place to use up the small amount of available cash to buy those few shares.

Instead of waiting for the TSLO to kick in and sell all shares of VPU, I removed the TSLO and sold at market in order to raise cash to purchase shares of VOX.  One limit order remains to add three more shares of VOX.

Franklin Security Recommendations

The following worksheet is unnecessary as the decision to purchase VOX or the Sector BPI recommendation overruled any recommendations to move down into the Dual Momentum™ or Income sections.  If readers have any questions, please drop them in the Comment section.  The investment priorities are as follows.

• First follow the sector recommendations.  If cash is available, then move to the Dual Momentum ETFs for another recommendation.
• If cash is still available, then drop into the Dual Momentum recommendation.  Had there been zero sector recommendation(s) I would have first filled up VEA as that is the current DM recommendation.
• If the DM requirement is filled or if there is no DM recommendations, then drop into the Income or Closed-End-Funds to use available cash.

This all sounds more complicated than it really is.  Just continue to follow the reviews of the Carson, Franklin, Gauss, and Millikan and you will pick up the management skills for the Sector BPI Plus style portfolios.

Franklin Manual Risk Adjustments

The one recommendation is to add three more shares of VOX to bring it up to 20% of the total portfolio.  When that limit order is struck, we will essentially be fully invested in equity ETFs.

Franklin Performance Data

How is this sector model panning out?  Thus far quite well as the Franklin is besting SPY by roughly 2% annualized.  The Franklin is also edging out both the AOA and AOR benchmarks.  This data dates back 16 months.

Franklin Risk Ratios

Franklin is one of the few portfolios with a positive slope for the Jensen Performance Index.  Most of the portfolios are still recovering from the miserable equities market of 2022.  As readers can see below, the Jensen only moved into positive territory this month.  Since I’ve been employing the Sector BPI model with the Franklin, the Information Ratio has been gradually improving.  Check the 2023 values and compare them with the negative values in 2022.

Buying Guidelines For BPI Model Portfolios: 9 December 2022

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