Millikan is the Sector BPI portfolio up for review this morning and the strong equities market is providing a boost to this portfolio. As a relatively new investing model the Sector BPI approach is still operating under the microscope. Consider this model is still operating in the hypothesis stage of development. Thus far the results are positive as readers will see below.
Millikan Security Recommendations
As with all Sector BPI portfolios we first fill in the sector ETFs if any there are any Buy recommendations. Based on the latest Bullish Percent Indicator (BPI) data, no sectors are oversold so there are no sector ETFs recommended for purchase. Instead, two holdings in the Millikan, Energy (VDE) and Financial (VFH) are overbought. Trailing Stop Loss Orders (TSLOs) are in place to sell all shares of both sectors. These TSLOs are not new orders, but have been in place for some time.
There is limited cash so we will not see much action on the purchase side. If you check the ETFs with either the dark blue or green background we find VOO (#4 rank) has the highest rank. I am using the ranking found in the 5th column from the right edge. The top three ranked ETFs are found among the sector ETFs and we bypass those rankings in favor of the Sector BPI rules for purchase. Remember the orders for purchasing securities.
If there are comments or questions, drop them in the Comment section provided with this blog post.
Millikan Manual Risk Management
With the available cash ($1,546.13) we set a limit order to add three (3) more shares of VOO.
To preserve capital I will also set 3% limit orders under SPY, ESGV, VOO, and VEA. A limit order to sell 200 shares of GLQ is already in place.
The move to place TSLOs under non-sector ETFs such as SPY, ESGV, VOO, and VEA is an additional wrinkle to managing a Sector BPI portfolio. This move is designed to protect capital and should the market decline, as it will eventually, cash will then become available to purchase sector ETFs when they dip into the oversold zone.
Millikan Performance Data
Over the past 18.6 months the Millikan is edging out the SPY benchmark. The delta between the benchmark and the Millikan is a tad greater than it was when last updated in early July.
Millikan Risk Ratios
The modest increase in the Sortino indicates the raw value of the Millikan is higher than it was in June despite the interest increase in the short-term risk-free treasury. The current rate is now over 3.0% for SHV.
The Jensen Alpha or Jensen Performance Index shows a major increase as does the Information Ratio. The positive slope (0.14) for the Jensen, while modest, is another clue the Millikan is performing at a high level.
Tweaking Sector BPI Plus Model: 20 May 2023
With each update of one of the Sector BPI portfolios I am trying to refine the management process so as to reduce portfolio risk while maintaining a respectable return. Setting TSLOs under non-sector ETFs is the latest enhancement in this process.
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VDE, VFH, and VPU have all been sold out of the Millikan. I will review this portfolio next week. The cash was used to purchase ESGV, VTI, VOO, and SPY.
Lowell