Joshua Tree National Park
Kepler is the portfolio up for review today. Before moving into the analysis, let me explain a mistake I made in purchasing a number of ETFs I mistakenly thought were equal-weight ETFs when in fact they are cap-weighted. The ETFs in question are those that begin with the XL ticker letters. To rectify this problem I’ve placed TSLOs under these ETFs so they will eventually be sold out of the Kepler and replaced with equal-weight sector ETFs when recommended or appropriate.
When a sector is recommended for purchase I will compare equal-weight and cap-weighted ETFs to see which is the better performer over the past five years. The top performer will end up as the one purchased. More details will come when this situation arises.
Kepler Investment Quiver and Holdings
Below is the current investment quiver and holdings for the Kepler. None of the sectors are in the oversold zone and with today’s up market I’ll be checking the BPI data to see if any sectors other than Financials and Technology moved into the overbought zone.
Kepler Manual Risk Adjustments
When there are no sectors recommended for purchase we move to the U.S. Equity ETFs (VTI, VOO, and ESGV) to see if they are a Buy. Using the BHS investing model and the default look-back periods, all three are recommended for purchase. When this is the case the next move is to check the ranking. Right now VOO is the highest ranked ETF from this group of three. If you check below readers will see that the Kipling spreadsheet is recommended one move VOO holdings up to 84 shares. There is sufficient cash to do this so I have several limit orders in place to bring VOO up to a total of 84 shares. The current position is 47 shares.
Kepler Performance Data
Keep in mind that the Kepler joined the Sector BPI investing club this month so there is very little data to go on when it comes to performance. Over the past 23 months the Kepler lagged the S&P 500 by five (5) percentage points. That is a lot. This differential is the primary reason for moving the Kepler over to the Sector BPI Plus investing model. The hope is that the Sector BPI Plus investing model will cut into this 5 point lead over the next year.
Kepler Risk Ratios
It will be several months before we begin to see any changes in the trend due to this new investing model. While the Jensen Alpha is improving the Information Ratio shows the Kepler lost ground to the benchmark this month.
Pay most attention to the Jensen, Information, and Sortino ratios in that order.
Discover more from ITA Wealth Management
Subscribe to get the latest posts sent to your email.
You must be logged in to post a comment.