I track the performance of each month's portfolio as well as previous months' performance. A summary of the data is listed below, including the percent each ETF is above/below the 200-day moving average.
Last month, the top three US sector performers based on the sum of the quarterly, half year, and annual returns were XLB (Materials), XLE (Energy), and XLV (Healthcare). This month, all of the sector ETFs are above their 200-day moving averages with the exception of XLF (Financials). The top three based on momentum this month are XLY (Consumer Discretionary), XLE, and XLV. In other words, the US sector model is rotating into the Consumer Discretionary sector and away from Materials. Since the strategy updates monthly, it may not always catch the beginning of a move, but it is a long-term strategy.
I have improved the way the performance of the sector momentum strategies are tracked. The strategies are tracked as a hypothetical portfolio with a starting balance of $10,000. Year to date, the US sector portfolio is up 11.73%, including dividends.
Last month, the top three Global sector performers based on the sum of the quarterly, half year, and annual returns were IXJ (Healthcare), KXI (Consumer staples) and IXC (Energy). This month, all of the sector ETFs are above their 200-day moving averages, which was also the case last month. The top three based on momentum this month are IXJ, IXC, and RXI (Consumer Discretionary). The strategy is rotating out of Consumer Staples (KXI) and into Consumer Discretionary.
This portfolio is also tracked as a hypothetical portfolio with a starting balance of $10,000. Year to date, the Global sector portfolio is up 2.61%, including dividends.
Potential strategies an investor could employ would be the following:
- Buy the top 3-6-12 or 6-month performers and hold for one month the rebalance at month end, based on the new momentum leaders. Or buy the top performer based on the 6-month performance.
- Buy the top performers only if they are also above the 200-day moving average.
- Buy any ETF which is above the 200-day moving average, sell if it drops below the 200-day average. Update once per month.
- Trade the top three momentum performers using a more detailed trading plan, such as one I detailed here.
The strategy used for the US and Global sector ETF portfolios is to buy the top three ETFs based on the average of their 3-, 6-, and 12-month returns. The top three momentum ETFs must also be above their 200-day simple moving average. The portfolio is updated once per month, at the end of the month.
For some additional background on the strategy, please click here and/or check out Mebane Faber's The Ivy Portfolio: How to Invest Like the Top Endowments and Avoid Bear Markets.
The data source for the information below is Finviz.
|Ticker||Company||Market Update||Performance (Quarter)||Performance (Half Year)||Performance (Year)||200-Day SMA|
|XLB||Materials Select Sector SPDR||Here||-1.08%||3.33%||44.85%||5.96%|
|XLE||Energy Select Sector SPDR||Here||-5.17%||11.35%||54.69%||8.73%|
|XLF||Financial Select Sector SPDR||Here||-6.00%||-3.03%||13.54%||-1.49%|
|XLI||Industrial Select Sector SPDR||Here||-0.64%||7.91%||38.85%||6.54%|
|XLK||Technology Select Sector SPDR||Here||-1.00%||2.68%||28.31%||2.37%|
|XLP||Consumer Staples Select Sector SPDR||Here||5.12%||7.95%||25.78%||6.54%|
|XLU||Utilities Select Sector SPDR||Here||6.12%||9.02%||24.14%||6.62%|
|XLV||Health Care Select Sector SPDR||Here||7.83%||13.84%||29.62%||9.81%|
|XLY||Consumer Discret Select Sector SPDR||Here||3.34%||8.00%||39.13%||7.48%|
|Ticker||Company||Market Update||Performance (Quarter)||Half Year||Year||200-Day SMA|
|EXI||iShares S&P Global Industrials||Here||-0.33%||7.22%||37.74%||6.05%|
|IXC||iShares S&P Global Energy||Here||-4.96%||8.61%||45.37%||6.19%|
|IXG||iShares S&P Global Financials||Here||-3.25%||1.71%||20.37%||0.09%|
|IXJ||iShares S&P Global Healthcare||Here||8.94%||13.82%||30.19%||9.75%|
|IXN||iShares S&P Global Technology||Here||-2.04%||-0.28%||23.86%||0.59%|
|IXP||iShares S&P Global Telecommunications||Here||1.00%||7.81%||30.98%||4.80%|
|JXI||iShares S&P Global Utilities||Here||2.94%||4.36%||18.59%||2.78%|
|KXI||iShares S&P Global Consumer Staples||Here||6.42%||8.44%||27.92%||7.24%|
|MXI||iShares S&P Global Materials||Here||-0.61%||1.52%||42.39%||4.56%|
|RXI||iShares S&P Global Cons Discretionary||Here||4.83%||7.40%||39.62%||7.23%|