The Hawking Portfolio is by far the most difficult portfolio to manage since it involves an assessment of over 200 assets narrowed down to a short list of ~80 assets comprising both Exchange Traded Funds (ETFs) and Closed End Funds (CEFs). The ETF portion of the portfolio looks primarily for growth while the CEF portion focuses more on income generation through distributions.
Let’s look first at current performance:
where we can see that we are keeping up with the ~21-month performance of the benchmark VTTVX Fund with a little less volatility.
Checking on the growth portion of the portfolio we see the following rankings and recommendations:
The asset list in the above screenshot is updated from last month’s list and reflects the top ranked assets from a total list of ~120 ETFs. Using the BHS model with Maximum Funds set to 10 we get 10 Buy recommendations and 3 Hold? recommendations. The Hold? recommendations are assets currently held but not ranking in the top 10 – while not suggested Sells they are considered discretionary Hold/Sell candidates.
The values shown in the “Difference” column are the suggested adjustments required to balance the portfolio to equal weighting. The suggested “Required” shares are passed through to the position sizing sheets that can be used to make manual adjustments at the discretion of the portfolio manager:
The “Required” shares from the “Tranche” Ranking sheet are shown in the “Recommended Shares from Auto” column. The portfolio manager can then make discretionary decisions as to how to adjust the portfolio by manually entering the required number of shares to be held into the “Shares to HOLD” column and this will generate the adjustments to be made in the “Shares to Hold” column. In the above example you will see that I plan to sell holdings in EMB nd PCY (discretionary Hold? recommendations) and to Buy shares in XLP, IYR, ITB, EWJ, PGX and ISD. I have chosen to ignore the VNQ Buy recommendation since VNQ is highly correlated with IYR (and I am presently holding VNQ in other portfolios). I have chosen to Hold IEF as a Bond holding since I am selling EMB and PCY (International Bonds). If orders for these adjustments are filled I will have a portfolio holding 10 ETFs with a risk of ~4% (with Stop orders in place).
Moving on to the Income portion of the portfolio we see the following rankings and recommendations:
These are CEFs and we have 10 Buy recommendations with 5 discretionary Holds.
Using the position sizing sheet to choose possible adjustments we see the following:
Adjustments are a little more difficult here but, if I sell holdings in CEE (a Hold?) I can add positions in RA, ABR, HTD and JRS. RA and HTD were adjustments that I had planned to make last month but, unfortunately, I got a little aggressive and my orders were not filled – and both Funds have since appreciated significantly. This month I will try not to be quite as “clever” and will place my orders closer to the Bid/Ask – and I will probably be buying at the highs 😉 . I am selling CEE (if I can) since it has abysmal liquidity with wide Bid/Ask spreads. I have tried to sell this Fund before with no success.
This would leave me with a portfolio of 14 Funds with ~6.2% risk.
I will report on my progress in the comment section.