What will the Millikan portfolio look like when populated by one of three ETFs? Three low cost ETFs are used with the Millikan. The expense ratios run from three (3) to six (6) basis points so this is a low cost portfolio to manage. While the dollars are available, no shares have been purchased.
Millikan Dual Momentum Recommendations: It is no surprise that SCHF, the international equity ETF, is the highest performer. Remember that VEU has also maintained first spot for many weeks in other DM portfolios and SCHF is a “first cousin” to VEU.
Dual Momentum Rules: Rank U.S. Equities (SCHB) and International Equities (SCHF) to see if either one is performing above SHY. This is the absolute momentum rule. Then compare the two ETFs to see which one ranks higher. This is the relative momentum part of the DM process. In the current situation, both ETFs are performing above SHY and SCHF is the better performer. Therefore, 100% of the portfolio is invested in SCHF.
If neither SCHB or SCHF is performing above SHY, invest 100% of the portfolio in bonds or SCHZ. Those are the rules for the Dual Momentum Model.