, rotating in the highest performing asset can bring additional returns. We use iShares’ ETFs to gain consistency. We have no affiliation or relationship with iShares.
|Russell Smallcap Growth||(IWO)||13.75%||14.83%||v|
|Russell Smallcap Index||(IWM)||12.27%||13.29%||v|
|Russell Midcap Growth||(IWP)||11.5%||13.33%||v|
|Russell Smallcap Value||(IWN)||11.43%||12.43%||v|
|Russell Midcap Value||(IWS)||11.09%||11.56%||v|
|Russell Midcap Index||(IWR)||10.92%||11.98%||v|
|Russell Largecap Value||(IWD)||9.72%||9.94%||v|
|Russell Largecap Growth||(IWF)||9.39%||10.61%||v|
|Russell Largecap Index||(IWB)||9.12%||9.94%||v|
The trend score is defined as the average of 1,4,13,26 and 52 week total returns (including dividend reinvested).
As expected, US equities are down across the board as concerns driven by Libya, oil prices and a possible slowing economy saps the enthusiasm for equities. However, the performance appears to mirror the words of Fed Chairman Bernanke when he said that rising oil prices will be a short term problem that will not be a long term problem.
While the top ETFs fall, there was the continued migration from MidCap to SmallCap as the SmallCap index slips past the MidCap growth ETF. This shows continued confidence in the economy with no move to Mid or even Large Cap funds. We also note that the returns for the prior week were up indicating that while there is concern about the problems in Libya and a recognition of a short term issue, confidence remains in the longer term horizon. We would anticipate that Smallcap Value will close in on the iShares Russell Midcap Growth Index (NYSE:IWP).
The Mid Cap funds are clustered in the middle of the table with a small gap as we drop into the Large Cap funds. We note that not only are Large Cap at the bottom but they are inverted in the sense that Value leads whereas in other sub-classes they lag. Our intuition is that those with Large Cap choices are looking to find extra returns in the higher risk piece. Note however, that the last week gain was not far off the top of the table which may indicate something of a move to safety.
We think that this picture will remain constant for a few weeks as the Libyan situation resolves itself — but it won’t be quick. The diplomatic drama has a certain set of rules it has to follow as it is played out on the world stage. France has stopped recognizing Gaddafi and others will likely follow suit. It isn’t clear whether after replacement there will be insurgency like Iraq or a representative government will take it’s place and life will return to normal. This will impact the amount of time that oil is at a level that can slow the economy and, at some point, there will be more of a move to a defensive posture.
Disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
LTI Systems, Inc. is the operator of MyPlanIQ.comand ValidFi.com. The founders of LTI Systems have extensive technology and business background in computer and semiconductor industries. They have been using the strategies provided by MyPlanIQ for their own personal retirement and taxable investments. The mission of LTI Systems is to make wealth management investment strategies that are used to be only accessible to institutions and high net worth individuals available to private investors with a fraction of flat cost and ease of use. The founders of LTI Systems, investors themselves, take pride in creating such a system and service for investors by taking the perspective from the investor side. They are using the system and the strategies for their own investment and align their interests with their customers.
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