Rutherford Portfolio Review (Tranche 1): 13 January 2023

Komodo Dragon – Natural Habitat, Komodo Island, Indonesia (Very Dangerous Animals)

It was a bullish week for US equities with the SPX (S&P 500 Index) up ~ 3% on the week:

After retracing 50% from the Early December highs we have bounced and could be on our way to new highs at ~4400 if we can take out the previous high of 4100 that will likely act as resistance. Should we manage to get through the 4100 level we might be a little more confident that we have moved out of the 2022 bearish channel and, maybe, into a new uptrend.

Despite the nice performance of US equities this was not the strongest major asset class of the week:

with Real Estate (VNQ and RWX) , Developed Market equities (VEA) and Commodities outperforming on a relative basis. Bonds were the weakest asset classes of the week although even these showed positive returns.

Current holdings in the Rutherford Portfolio look like this:

with the portfolio outperforming the benchmark AOR Fund since moving to this model in November/December:

[Note: Last week’s comparison graph screenshot was incorrect – the formula that I was using to calculate AOR performance referenced the wrong cells – this has been corrected for the above screenshot}

Tranche 1 (the focus of this week’s review) has been the best performing tranche over the past month and is holding positions in VWO (Emerging Market equities), RWX (International real Estate), PCY (International Bonds) and Gold (GLD).

Checking this week’s rotation graphs:

we see a lot of action in the desirable top right hand quadrant with VEA leading in terms of long term relative strength.

This is reflected in the recommendations from the model:

that shows a lot of green and recommendations to Buy VEA, VWO, RWX and PCY although GLD, TLT and VNQ also have scores of 9 or more.

I will follow the recommendations and adjust as shown below:

i.e. I will sell shares in GLD and use the Cash to buy shares in VEA.

David