Franklin Sector BPI Portfolio Review: 8 June 2023

Pismo Beach Park

In the early years of the Franklin this was a Dual Momentum™ portfolio or should I say it was managed using the DM model.  Dissatisfied with performance I moved the Franklin over to the Sector BPI investing model.  While it is still too early to know if this was a positive move, the early signs are looking up.  Both the DM and Sector BPI models are designed to prevent large losses in bear markets so the models have that in common.

As readers will see, one drawback to the Sector BPI model is that lack of cash can be a problem.  This problem shows up this morning and I’ll explain as I walk through the analysis.

Franklin Security Recommendations

This morning I checked the Bullish Percent Indicator (BPI) data and Utilities is still a buy.  That is the only sector oversold so it is recommended for purchase.  I’ll be updating the BPI data this weekend so watch for that blog post.  Technology dropped out of the Sell zone.  None of the portfolios held shares in that sector so the recommendation is a moot point.

Keep in mind how the Sector BPI Plus portfolios are populated.

• Fill recommended sectors first.  That means loading up shares of VPU till it amounts to nearly 18% of the portfolio.
• If cash is available, check to see if VTI, VEA, VWO, or BND are showing a Buy recommendation.  Purchase shares of the highest ranked ETF.  In the worksheet below, VTI is that Exchange Traded Fund (ETF).
• Only after the two above are filled do we move to pick up shares of the Closed-End-Funds (CEFs)

With only $50 in cash remaining, there is insufficient money available to purchase all the recommended Utilities sector or VPU.  Therefore no shares of VTI will be purchased.

Franklin Performance Data

Over the past 17+ months the Franklin holds a slight lead on the S&P 500 (SPY).  In addition the Franklin is besting all possible benchmarks tracked using the Investment Account Manager software.

Franklin Risk Ratios

While May was not a strong month for the Franklin, the positive market thus far in June has given a boost to the Jensen Alpha.  Since moving from the DM model to the Sector BPI model the Franklin has managed to stay ahead of its benchmark.  Check the Information Ratio for this positive trend.

The last bragging item is to see a positive slope for the Jensen Performance Index (Jensen Alpha).  Any positive slope is to be celebrated.

Buying Guidelines For BPI Model Portfolios: 9 December 2022

Tweaking Sector BPI Plus Model: 20 May 2023

If you have any comments or questions, post them in the Comment section provided.  Or start a discussion in the Forum section of the blog.

No changes are required in the Franklin this month as there is no more cash to invest.  Were the owner of this portfolio to deposit more cash, that money would be used to purchase more shares of VPU.