Franklin Sector BPI Portfolio Review: 15 July 2025

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Franklin is one of three Sector BPI portfolios, all named after women scientists.  Since the last review of the Franklin, shares of VHT and VOX were sold out of the portfolio leaving shares in Consumer Staples (VDC)  and Energy (VDE).  The Franklin also holds shares in VOO and the bulk of the portfolio resides in a short-term treasury, SHV.

We now patiently wait for one or more sectors to drop into the oversold zone.  Oversold is when a sector finds only 30% or fewer of the stocks within the sector classified as bullish.  To determine if a sector is bullish or bearish we use Bullish Percent Indicator (BPI) data from StockCharts.  Currently, no sectors are oversold so there are no buying opportunities based on the Sector BPI investing model.

Franklin Security Holdings

Below are the current holdings for the Franklin portfolio.  The current beta for the Franklin is a very low 0.208.  The three-year average volatility for SHV is 0.23 and the large position in SHV brings down the portfolio beta.  As readers will see in a moment, this low beta accounts for a high Treynor Ratio.  It Franklin were not outperforming its benchmark the Treynor would be exaggerated to the downside.  This is one reason why I am not a huge fan of the Treynor Ratio as it is too heavily dependent on the portfolio beta.  The Jensen Performance Index or Jensen Alpha is a more stable measurement of portfolio risk.

Franklin Performance Data

Since 12/31/2021 the Franklin has outperformed the AOR benchmark, but lags the S&P 500 (SPY) standard.  As readers can see from the asset allocation plan, this is a very conservative portfolio in its current condition.  Unless we begin to see a reduction in political chaos I will maintain low volatile positions.  The Copernicus portfolio is an exception as the Copernicus is build heavily on U.S. Equity Exchange Traded Funds (ETFs).

Franklin Risk Ratios

The 2025 July data is well above the 2024 July data.  That is good news.  I already explained why the jump in the Treynor value.  Of some concern is the month to month decline in both the Jensen and Information Ratios.  With the equity market moving up and the Franklin holding a majority position in SHV, these two risk metrics declined.  This is the price one pays for taking a conservative position.  It is extremely difficult to outfox the U.S. stock market.

Comments and questions are always welcome.

Franklin Portfolio Review: 21 July 2023