Current Recommendations

Model / Changes / Holdings As of 4/15/19

Tactical Fixed Income
Most recent allocation changes as of 4/8/2019
Holdings: BAB, CWB, PGX, SJNK, VCIT

+0.2% wk +3.4% ytd

Global Multi-Asset Income
Most recent allocation changes as of 4/1/2019
Holdings: EMB, PGX, USMV, VNQ, YYY

+0.1% wk +4.4% ytd

Factor Rotation
Most recent allocation changes as of 4/1/2019
Holdings: ALFA, FPX, FV, Cash (1%)

+0.2% wk +9.4% ytd

Sector Rotation
Most recent allocation changes as of 4/1/2019
Holdings: EMLP, FDN, ICF, XBI

-0.8% wk +4.9% ytd

International Rotation
Sell iShares Global Infrastructure ETF (IGF) (20%)
Buy iShares MSCI Belgium Capped ETF (EWK) (20%)
Holdings: ASHR, EPP, EWK, GREK, INDY

+0.0% wk +7.7% wk
Note: New recommendations recorded at the closing price on the day recommendation is made. You may place trades as soon as you receive this update. 

Commentary
Glimmers of Hope for China’s Economy

Reuters reports that the IMF expects China to grow at a pace of 6.3% this year, down from last year’s rate of 6.6%, which was the slowest rate experienced since 1990. This slowdown poses a risk for the global economy. If it continues, it could cause weakness in the economies of other countries by slowing China’s demand for imports.

But there may be hope. While Bloomberg reports that new data being released this week is expected to show growth declining to 6.3% in the first quarter of 2019, “monthly readings of retail sales, investment and industrial output will be scrutinized for signs of renewed health.” Better manufacturing data along with corporate tax cuts and developments in a trade deal between China and the U.S. are all factors indicating that Chinese economic performance may improve soon, leading analysts from banks such as HSBC Holdings PLC and Goldman Sachs Group Inc. to show increasing confidence in the future of China’s economy.

Some favorable reports have already emerged. The Wall Street Journal reports that in March, consumer and producer prices were accelerating their upward movements. Both had been decelerating since 2018. Consumer prices rose 2.3% from a year earlier, while producer prices rose 0.4% from a year ago. Vegetable and pork prices were two main sources of the increasing inflation in consumer prices, while rising oil prices played a part in helping producer prices to rise at a faster pace.

Export data has also been favorable for China over the past three months. The Journal reports that exports for the first quarter of this year were up 1.4% after seeing a drop of 7.6% in December. Import data did not look as favorable, with imports being down almost 5% in the first quarter.

Another sign of hope for China’s economy has been an increase in the availability of credit recently. Yields on low-rated bonds have declined by about 0.5 percentage points since late 2018. With lower yields on debt instruments, more companies can afford to borrow capital to expand and run their businesses, stimulating the economy toward a higher growth rate.

Tactical Fixed Income rose 0.2% last week. The worst-performing holding of the strategy was the Invesco Preferred ETF (PGX), which fell 0.34%. The best-performing holding was the SPDR Bloomberg Barclays Convertible Securities ETF (CWB), which rose 0.53%. There were no changes to the strategy this week.

Global Multi-Asset Income rose 0.1% last week. The worst-performing holding was the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB), which fell 0.51%. The best-performing holding was the YieldShares High Income ETF (YYY), which rose 0.5%. There were no changes to the strategy this week.

Factor Rotation rose 0.2% last week. The worst-performing holding was the First Trust Dorsey Wright Focus 5 ETF (FV), which fell 0.42%. The best-performing holding was the AlphaClone Alternative Alpha ETF (ALFA), which rose 0.57%. There were no changes to the strategy this week.

Sector Rotation fell 0.8% last week. The worst-performing holding was the SPDR S&P Biotech ETF (XBI), which fell 4.16%. The best-performing holding was the First Trust Dow Jones Internet ETF (FDN), which rose 0.68%. There were no changes to the strategy this week.

International Rotation was flat last week. The worst-performing holding was the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), which fell 1.85%. The best-performing holding was the Global X MSCI Greece ETF (GREK), which rose 1.9%. This week, the strategy sold the iShares Global Infrastructure ETF (IGF) and bought the iShares MSCI Belgium Capped ETF (EWK).

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