Danish painting of farm scene.
Kepler is the Sector BPI portfolio scheduled for review today so we need to check to see if any of the overbought sectors are part of the Kepler. Readers who checked the Forum yesterday were notified of several BPI changes. Notably, Industrial (VIS), Materials (VAW), and Real Estate (VNQ) joined Energy (VDE), Financial (VFH), and Utilities (VPU) as overbought sectors. Six of the eleven market sectors are currently overbought.
Utilities (VPU) is a primary holding in the Kepler. A TSLO is in place to sell all shares. The single share of Energy requires no attention. This share will be swept up in the next buy cycle.
Kepler Investment Quiver and Holdings
Below is the investment quiver and current holdings in the Kepler. The owner will need most of this cash in the near future.
Kepler Manual Risk Adjustments
Even if cash were not needed no moves are likely this month for the Kepler. Even a Buy for VWO is not recommended for any additions.
Kepler Performance Data
Since 12/31/2021 the Kepler lags the SPY benchmark by six percent points annualized. The gap will be difficult to overcome, but it is something to work on. The first hurdle is to surpass the AOR benchmark as it is the easiest to pass. Next on the list is AOA followed by VT.
Kepler Risk Ratios
On a risk adjusted basis (Jensen) the Kepler improved since last May. However, a head to head comparison with the SPY benchmark, something measured by the Information Ratio, the Kepler fell behind the benchmark (SPY).
The good news to come out of the following data is the positive slope (0.40) of the Jensen Alpha, otherwise known as the Jensen Performance Index.
Overall, the Kepler is one of the poorest performing portfolios tracked here at ITA.
Kepler Sector Portfolio Report
Isolating the sector ETF performance within the Kepler we see the IRR for the period from 10/1/2023 through 5/15/2024 is a winner for the portfolio. 30.1% compared to 23.0% for SPY is a slight victory. The margin is even greater if the S&P 500 (19.5%) is used for comparison.
Once more, the Sector BPI investing model is showing itself to be a useful approach to portfolio management. It requires a little more work than either the Schrodinger or Copernicus. If the Sector BPI continues to show promise the Kepler should begin to close the gap on the SPY benchmark.
Tweaking Sector BPI Plus Investing Model: Part II
Millikan Sector BPI Portfolio Review: 10 May 2024
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