This week has been a tough week for most markets and our Derby “horses” that were heavily weighted towards International Equities lost more ground, despite a rally earlier in the week. The present positions are shown below and relative positions have not changed since last week.
Our new “horses” are represented by assets that have 3 ETFs in common; TLT (Treasuries), XLV (Health Care) and XLP (Consumer Staples). C_4 and C_C4 both contain SHM (Municipal Bonds) as the 4th asset with 10-4 (no cluster analysis) containing the only equity ETF, IBB (Biotech) and 10_C4 containing IEF (a Treasury ETF similar to TLT) as the 4th asset. The only significant difference between these portfolio is the higher portfolio beta (0.78) of 10_4 as a consequence of the inclusion of IBB.
The hand-over to the new assets will be based on Monday’s opening prices.
It should be remembered that, although this test is based on the Hawking Asset lists, the “horses”, or asset allocations, are different from the assets held in the “live” Hawking portfolio. At present only TLT is held in the “live” portfolio.
Addition in response to Herb’s comment below:
Cluster Hierarchy diagram for 10_C4 scenario: