RIA - Sector Rebalance Update, Monday 10 March
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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:
Alex King
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 opening positions of the model are as follows below.