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October's U.S. and Global Sector ETF portfolios have been updated at Scott's Investments. 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.

US Sector

Last month the top 3 US sector performers based on the sum of the quarterly, half year, and annual returns were XLV (Health Care), XLP (Consumer Staples) and XLU (Utilities). Interestingly, they were the only 3 ETFs also above their 200 day moving average at month end. This month only 1 ETF in the list of 9 is above its 200 day moving average at month end - XLU. Therefore, the strategy is selling XLV and XLP and keeping the proceeds in cash.


This strategy is tracked as a hypothetical portfolio with a starting balance of $10,000. Year to date the U.S. Sector portfolio is down .22%, including dividends.
Since the strategy updates monthly, it may not always catch the beginning of a move but it is a long-term approach for capturing large trends.

Global Sector

Last month there were only 2 ETFs above their respective 200 day moving average at month end, IXJ (healthcare) and KXI (consumer staples). At the close of September none of the ETFs in the Global Sector list were above their 200 day moving average. Therefore, the portfolio is selling IXJ and KXI and staying 100% in cash until the next portfolio update.

This portfolio is also tracked as a hypothetical portfolio with a starting balance of $10,000. Year to date the Global Sector portfolio is down 10.38%, 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 3 momentum performers using a more detailed trading plan such as one I detailed here.
The strategy used for the U.S. and Global Sector ETF portfolios is to buy the top 3 ETFs based on the average of their 3, 6, and 12 month returns. The top 3 momentum ETFs must also be above their 200 day simple moving average. If there are not 3 ETFs above the 200 day moving average, then the strategy allocates the position to cash. For example, if only 2 ETFs are above their 200 day moving average, the portfolio will hold approximately 1/3 in cash. 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.

US SECTOR











Symbol Name Quarterly 6 Month Year Average 200 Day SMA
XLB Materials Select Sector SPDR -25.72% -26.13% -9.62% -20.49% -21.50%
XLE Energy Select Sector SPDR -22.77% -26.29% 4.59% -14.82% -19.00%
XLF Financial Select Sector SPDR -24.15% -28.03% -17.41% -23.20% -22.11%
XLI Industrial Select Sector SPDR -22.49% -22.25% -4.79% -16.51% -16.68%
XLK Technology Select Sector SPDR -9.30% -8.56% 4.01% -4.62% -6.90%
XLP Consumer Staples Select Sector SPDR -5.09% 0.03% 9.24% 1.39% -0.96%
XLU Utilities Select Sector SPDR 0.24% 6.83% 11.14% 6.07% 5.19%
XLV Health Care Select Sector SPDR -11.29% -3.67% 6.16% -2.93% -4.05%
XLY Consumer Discret Select Sector SPDR -14.73% -10.68% 5.93% -6.49% -8.80%




Global Sector











Symbol Name Quarterly 6 Month Year Average 200 Day SMA
EXI iShares S&P Global Industrials -24.08% -23.76% -8.43% -18.76% -18.62%
IXC iShares S&P Global Energy -21.32% -25.17% -1.75% -16.08% -17.77%
IXG iShares S&P Global Financials -26.11% -27.82% -20.11% -24.68% -22.40%
IXJ iShares S&P Global Healthcare -11.56% -3.21% 4.36% -3.47% -4.43%
IXN iShares S&P Global Technology -11.83% -12.24% -1.07% -8.38% -10.22%
IXP iShares S&P Global Telecommunications -11.19% -10.02% -1.67% -7.63% -6.74%
JXI iShares S&P Global Utilities -10.78% -7.61% -5.22% -7.87% -6.72%
KXI iShares S&P Global Consumer Staples -7.52% -1.81% 5.02% -1.44% -2.74%
MXI iShares S&P Global Materials -27.62% -27.87% -14.59% -23.36% -23.58%
RXI iShares S&P Global Cons Discretionary -18.28% -13.62% -1.51% -11.14% -12.24%



Disclaimer: No current positions in stocks mentioned. Please note that Scott's Investments is not a financial adviser. Please consult your own investment adviser and do your own due diligence before making any investment decisions. Please read the full disclaimer at the bottom of Scott's Investments.

Source: U.S. And Global Sector ETF Portfolios For October