US and Global ETF Sector Portfolio for July

Please see the right hand side of Scott's Investments for the July update to the US and Global Sector ETF portfolios. 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 XLB (Materials), XLE (Energy), and XLV (Health Care). This month all of the sector ETFs are above their 200 day moving average with the exception of XLF (Financials). The top 3 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.

Global Sector

Last month the top 3 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 average which was also the case last month. The top 3 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 3 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 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. 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.

No positions

US Sector:

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%

Global Sector:

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%

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