Current Recommendations

Model / Changes / Holdings As of 9/16/19
Tactical Fixed Income
Sell iShares 7-10 Year Treasury Bond ETF (IEF) (20%)
Buy SPDR Blackstone/GSO Senior Loan ETF (SRLN) (20%)
Holdings: BAB, BIV, BND, SRLN, VCIT
-2.2% wk +5.2% ytd
Global Multi-Asset Income
Sell Invesco Taxable Municipal Bond ETF (BAB) (20%)
Sell iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB) (20%)
Buy SPDR S&P Dividend ETF (SDY) (20%)
Buy Invesco S&P 500 High Dividend Low Volatility ETF (SPHD) (20%)
Holdings: GLDI, SDY, SPHD, USMV, VNQ
-2.1% wk +2.4% ytd
Factor Rotation
Sell First Trust US Equity Opportunities ETF (FPX) (33%)
Sell Invesco DWA Momentum ETF (PDP) (34%)
Sell iShares Edge MSCI Minimum Volatility USA ETF (USMV) (33%)
Buy AlphaClone Alternative Alpha ETF (ALFA) (33%)
Buy VanEck Vectors Morningstar Wide Moat ETF (MOAT) (33%)
Buy iShares Edge MSCI USA Value Factor ETF (VLUE) (33%)
Holdings: ALFA, MOAT, VLUE, Cash (1%)
-2.2% wk +4.8% ytd
Sector Rotation
Most recent allocation changes as of 8/26/2019
Holdings: ICF, IHI, ITB, XSD
+0.3% wk +0.4% ytd
International Rotation
Buy Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR) (20%)
Buy WisdomTree Japan Hedged Equity Fund (DXJ) (20%)
Buy iShares MSCI Netherlands ETF (EWN) (20%)
Buy iShares MSCI Taiwan Capped ETF (EWT) (20%)
Holdings: ASHR, DXJ, EWL, EWN, EWT
-0.1% wk -5.8% ytd

 

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
Oil Prices Surge After Attack on Saudi Oil Facilities

Over the weekend, an attack was carried out on Saudi Arabia’s oil facilities. This attack has at least temporarily hampered production in the country, reports The Wall Street Journal. The attack cut 5.7 million barrels of daily production, about half of Saudi Arabia’s capacity. Saudi officials hoped to restore about a third of the lost production by the end of Monday (Sept. 16).

According to the Journal, Saudi Arabia is worried that other oil-producing countries could ramp up production to make up for the decreased production, possibly costing Saudi Arabia market share. Saudi Arabia said that it could mitigate the effects of lower production by tapping into its oil reserves. The U.S. also stated that it can use oil from the U.S. Strategic Petroleum Reserve if the need arises.

Oil prices have reacted strongly to the news. Reuters reports that Brent crude futures were up as much as 19.5%, the largest intraday gain since 1991. Meanwhile, U.S. West Texas Intermediate futures were up as much as 15.5%, the largest intraday gain since 1998. Prices later retreated from those intraday highs.

The Journal also reports that the recent attacks on the Saudi Arabian Oil Co., also known as Aramco, could derail IPO plans for the company. Depending on the extent of the damage to the company’s assets, officials may desire to push back previously planned steps in the IPO process until production is again at full capacity. Officials had hoped to have a Saudi listing for the company in November.

Tactical Fixed Income fell 2.2% last week. The worst-performing holding was the Invesco Taxable Municipal Bond ETF (BAB), which fell 2.90%. The best-performing holding was the Vanguard Total Bond Market ETF (BND), which fell 1.78%. This week, the strategy sold the iShares 7-10 Year Treasury Bond ETF (IEF) and bought the SPDR Blackstone/GSO Senior Loan ETF (SRLN).

Global Multi-Asset Income fell 2.1% last week. The worst-performing holding was the Invesco Taxable Municipal Bond ETF (BAB), which fell 2.90%. The best-performing holding was the iShares Edge MSCI Minimum Volatility USA ETF (USMV), which fell 1.33%. This week, the strategy sold the Invesco Taxable Municipal Bond ETF (BAB) and the iShares J.P. Morgan USD Emerging Markets Bond ETF (EMB). The strategy bought the SPDR S&P Dividend ETF (SDY) and the Invesco S&P 500 High Dividend Low Volatility ETF (SPHD).

Factor Rotation fell 2.2% last week. The worst-performing holding was the Invesco DWA Momentum ETF (PDP), which fell 2.96%. The best-performing holding was the iShares Edge MSCI Minimum Volatility USA ETF (USMV), which fell 1.33%. This week, the strategy sold the First Trust US Equity Opportunities ETF (FPX), the Invesco DWA Momentum ETF (PDP), and the iShares Edge MSCI Minimum Volatility USA ETF (USMV). The strategy bought the AlphaClone Alternative Alpha ETF (ALFA), the VanEck Vectors Morningstar Wide Moat ETF (MOAT), and the iShares Edge MSCI USA Value Factor ETF (VLUE).

Sector Rotation rose 0.3% last week. The worth-performing holding was the iShares U.S. Medical Devices ETF (IHI), which fell 1.16%. The best-performing holding was the SPDR S&P Semiconductor ETF (XSD), which rose 2.86%. There were no changes to the strategy this week.

International Rotation fell 0.1% last week. The only holding was the iShares MSCI Switzerland ETF (EWL), which fell 0.63%. This week, the strategy bought the Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), the WisdomTree Japan Hedged Equity Fund (DXJ), the iShares MSCI Netherlands ETF (EWN), and the iShares MSCI Taiwan Capped ETF (EWT).

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