RIA - ETF Sector Rotation Update, Thursday 20 March
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PRICING - HEADS UP
If you’re reading this and thinking about adding additional users to your RIA Insight Pro subscription, please consider doing so before 31 March, when prices rise for this service. Right now the rack rate for a subscription is $1999/yr; that will rise to $2999/yr on 31 March. We can add members of your team to your subscription our side you prefer - just send us their email address and name to minerva@cestriancapital.com.
Now to business.
Rebalancing Backgrounder
by Alex King & Jay Urbain, Cestrian Capital Research, Inc.
AS A REMINDER - this is how the sector rotation model portfolio runs here in our RIA Insight Pro service. Please take a moment to read this note, particularly if you are new here.
In essence, the rotation model takes the following logic:
- Make a risk on/risk off assessment. The model analyzes the S&P500 ETF, $SPY, to reach this view. If the model believes $SPY is headed for a material correction, it will declare ‘risk off’ and move its model capital out of the market altogether.
- If the model believes $SPY is in good health, it will then go on to decide which three of a long list of sector- and other ETFs should be held in the model portfolio. At this stage the list of ETFs the model chooses from includes: SPY, XLK, XLV, XLF, XLRE, XAR, XLE, XLP, XLC, XLY, XLI, XLU, XLB, XME, SOXX, TLT
- The model runs once per day after the New York close. We update our subscribers in short form via Slack channel alert, and in long form with a post on our website which is also delivered by email.
The latest model positions are as below.