American Goldfinch
Franklin is one of three Sector BPI portfolios tracked here at ITA Wealth Management. This investing model is not likely to be available elsewhere on the Internet so pay close attention. Of the portfolios that are likely to withstand a recession as well as the coming Financial Repression, these three portfolios have a high probability of doing rather well. At least that is the history so far. The remaining days of 2026 and 2027 will be a real test to portfolio management. It is likely that straight indexing will experience severe losses.
Franklin Security Holdings
Below are the current holdings for the Franklin portfolio. Note that I am not holding any shares of either VTI or RSP. Heretofore, when excess cash was available I would invest in U.S. Equities such as VOO, RSP or VTI. With the stock market now overvalued by a large margin, I am now investing excess cash in short-term treasuries (SCHO). Instead of holding cash in a money market where interest rates are very low, I am purchasing shares of SCHO which currently pays 4.0%. This is not a high percentage and barely offsets inflation. Expect inflation to rise so I will need to look for treasuries paying a higher percentage. If readers have recommendations, place your ideas in the Comment section provide below.
One of the indicators I use to determine overall market conditions is the Buffett Indicator. Values over 100% indicate the market is overvalued. We are long overdue for a major correction. This is the time to be patient and keep cash available for better buying opportunities. I think of SCHO as cash.
Franklin Performance Data
Since 12/31/2021 or over four years, the Franklin has outperformed all tracked benchmarks here at ITA with exception of the S&P 500. The 48.6% in Fixed Income is the holding in SCHO.
Franklin Risk Ratios
Every risk ratio is higher than it was a year ago. Treynor, my least favorite risk measurement, took a huge leap due to increasing holdings in SCHO. SCHO is a very low volatile ETF and low volatile securities lowers the overall portfolio beta and when that is the situation, the Treynor is exaggerated either up or down.
Of more importance are the improvements in the Jensen Performance Index and Information Ratio. We still have half of May to impact data so don’t get too comfortable with the current positive values.
Franklin Sector BPI Portfolio Review: 20 March 2026
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Hi Lowell,
I’m very interested in your financial repression investment strategy. What do you think about the inclusion of TIPS and Gold in a portfolio. Wouldn’t financial repression increase inflation which would directly affect both assets?
Thank you, Bill