Exchange Traded Funds or ETFs are open-ended mutual fund trusts, units of which
are listed and traded on major stock exchanges just like individual stocks.

ETFs offer investors the advantages of a traditional mutual fund,
plus the trading freedom of a stock, at a very low price.

Things you need to know before using any active management strategy..

  • No model works all the time so be patient and control your emotions.
  • The components of the model must be investable which is now possible with the growing selection of sector exchange traded funds.
  • Strategy models such as balanced, large cap, small cap or global vary in risk and suitability should be determined with the advice of an approved industry professional.

For more information contact us at: info@gettingtechnical.com


Objective

  • To outperform the local benchmark by quarterly re-weighting exposure in a 10 component CDN$ iShares Global Growth Portfolio.

Methodology:

  • The benchmark is the S&P/TSX60 or the TSX listed iShares XIU.
  • The iShares Global Growth Portfolio is referred to as iShares Growth Equal Weight.
  • The Model Rotation Portfolio is referred to as iShares Growth Proportionality.
  • A fully invested strategy is adopted and no market timing will be attempted.
  • The portfolio will be re-balanced once a quarter as dictated by a monthly sector ranking table published by Getting Technical.
  • Income from the invested components and trading fees are excluded from the model.


The opening portfolio is created on December 31, 2010 with $100,000 invested “equal money” into a basket of ten TSX listed global iShares.

At the close of March 31, 2011 we net +4.07 just below the S&P/TSX60 index.


Only three components to re-weight. The benchmark S&P/TSX60 drops -5.77%

At the close of June 30, 2011 we jump over the S&P/TSX60 to gain +2.64% partily due to our over-weight in the iShares NASDAQ 100 Index (XQQ).


Two components are re-weighted. A bad quarter as all component sectors decline except our over-weight in the iShares Gold Trust (CGL).

The model has smaller losses and begins to out-perform.


There are two trades as we go to over-weight iShares S&P Global Healthcare Index (XHC). This top perfoming sector pushes the model to out-perform for the quarter.

At the close of December 31, 2011 we say goodbye to a poor year with the beachmark down -11.5%.


Again this quarter there are only two trades. We are over-weight in iShares MSCI Emerging Markets (XEM) which gains +13%.

At the close of March 31, 2012 the iShares Growth Proportionality model generates above equal weight and benchmark returns.


Three trades needed to re-weight. We are over weight in iShares S&P Global Healthcare Index (HXC) and light weight in the iShares S&P/TSX Energy Index (XEG).

The benchmark gives up a negative -6.26% and our model slides -4.23%.


Again we need three trades to re-weight. An over-weight in the iShares NASDAQ 100 Index (XQQ) helps us but an under-weight in the iShares S&P/TSX Energy Index (XEG) hurts us.

At the close of September 30, 2012 we gain 5.3% just under the benchmark gain of +6.02%.


Three trades. Our over-weight in the iShares MSCI EAFE Index Fund (XIN) is a plus and our over-weight in the iShares S&P 500 Index (XSP) is a negative.

We again 0.77% at the close of December 31, 2012 just under the benchmark gain of +1.02%.


Only one trade to re-weight. We are over-weight in the hot iShares S&P 500 Index (XSP) and the iShares S&P Global Healthcare Index (XHC.

At the close of March 29, 2013 the S&P/TSX60 gains 3.09% and the model gains 5.08%.


Only one trade this quarter. Our over-weight in the iShares S&P Global Healthcare Index (XHC) has us out performing the S&P/TSX60 Index.

At the close of June 28, 2013 we give up only -2.54% in an overall down quarter.


This quarter we needed four trades to re-weight the comonent exposure. We are over-weight in the iShares NASDAQ 100 Index (XQQ) and the iShares MSCI EAFE Index Fund (XIN).

At the close of September 30. 2013 the model gains +6.81%.


Only one trade needed to re-weight the model. We are now over-weight in the iShares S&P/TSX Financials Index (XFN) and the iShares S&P 500 Index (XSP).


For the quarter at December 31, 2013 the model posts a gain of +7.26%.


Buy & Hold returns $100,000 (excluding dividends and other income):
Twelve Quarters December 31, 2010 through December 31, 2013.

  • $100,000 S&P/TSX60 return excluding income & costs = $102,074
  • $100,000 iShares All Country Index Fund (ACWI) return excluding income & costs = $123,093
  • $100.000 iShares Growth Proportionality model return excluding income & costs = $127,084


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