7 ETF Model Portfolios You Can Use – Updated through 5/14/2013

Ulli Model ETF Portfolios Contact

And the beat goes on. After a slight breather on Monday, the major market ETFs took off again yesterday and set some new highs in the process. The S&P 500 gained +1.48% since last week’s ETF Model Portfolio report.

Needless to say, it’s been equities all the way this year with bonds getting pushed aside while precious metals have been spanked, which is reflected in the lack of performance of funds like PRPFX and its ETF equivalent.

As I have posted before, star performers so far this year have been the low volatility ETFs, such as XLP and SPLV, which we own in my advisor practice. I simply like their lower beta which, at least in theory, will reduce the speed with which things will go down but, in this manipulated market environment, you can’t be 100% sure. When this bubble bursts, as it eventually will, we will rely on our sell stops and/or trend line breaks to get us safely to the sidelines.

Here’s the latest update:

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After A Breather, Bulls Hit Fresh All-Time Highs

Ulli Market Commentary Contact

Tue pic

[Chart courtesy of MarketWatch.com]

Equities got back to their winning ways, notching solid gains amid optimism that the bulls still have room to run. The Nasdaq hit its highest level since November 2000 while the Dow Jones Industrial Average and Standard & Poor’s 500 Index hit fresh all-time highs. The Dow Jones jumped 124 points (0.8%) to 15,215, the S&P 500 Index was 17 points (1.0%) higher at 1,650, and the Nasdaq Composite gained 24 points (0.7%) to 3,463.

Stocks were off to the races as financials paved the way higher when hedge-fund manager David Tepper called U.S. banks “a good sector.” Bank of America Corp. and Citigroup Inc. rose more than 2.4 percent while Goldman Sachs was the top performer with 4.89% gain. The financial sector advanced 1.7%.

Three growth-sensitive sectors also finished among the leaders despite the relative weakness across the commodity complex. Crude oil fell 1.0% to $94.20, but the energy sector rose 1.3%. Elsewhere, copper declined 2.1% to $3.289 per pound while gold shed 0.8% to $1423.70 per ounce. The basic materials sector, however, climbed 1.2%. Industrials also ended in the black as transportation-related names led the way. The Dow Jones Transportation Average jumped 1.9% to a new record high. The technology sector did not play along with other cyclical groups. Tech shares lagged throughout the day while the relative strength of biotechnology kept the Nasdag from falling too far behind the Dow and S&P.

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Bulls Take a Break in Quiet Session

Ulli Market Commentary Contact

TTI

[Chart courtesy of MarketWatch.com]

Index ETFs kicked off the week with an orderly session, ended flat on Monday and pausing after hitting record highs last week. The market was once again unfazed by a strengthening U.S. dollar. The Dow Jones Industrial Average fell 27 points (0.2%) to 15,092, the Standard & Poor’s 500 Index was unchanged at 1,634, and the Nasdaq Composite gained 2 points (0.1%) to 3,439.

The U.S. Dollar Index rallied for the third straight session and was trading around 83.24, up 0.1%. Part of the greenback’s recent strength is due to reports that the Fed is mapping out plans to wind down its $85 billion a month in asset purchases.

The strength in healthcare stocks helped to keep declines in check. The S&P 500 healthcare sector climbed 0.7 percent and was the best performer. Biotech names provided support for the health care space, which led throughout the day. Meanwhile, other defensively-oriented groups were mixed. The staples sector registered a slim gain while utilities and telecom ended with modest losses. The utilities sector shed 0.6% to extend its recent weakness. While defensive groups saw mixed results, cyclical sectors ended generally lower with financials being the exception.

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ETFs/Mutual Funds On The Cutline – Updated Through 5/10/2013

Ulli ETFs on the Cutline Contact

Below are the latest ETF Cutline reports, which show how far above or below their respective long-term trend lines (39 week SMA) my currently tracked ETFs/MFs are positioned.

The first report covers the ETF Master List from Thursday’s StatSheet and includes 398 ETFs, of which currently 342 (last week 354) of them are hovering in bullish territory.

The second report includes only High Volume ETFs. To clarify, High Volume (HV) ETFs are defined as those with an average daily volume of $10 million or higher.

These ETFs are generated from my selected list of some 93 that I use in my advisor practice. It cuts out the “noise,” which simply means it eliminates those ETFs that I would never buy because of their volume limitations. 72 ETFs (last week 73) have managed to remain in bullish territory after the recent market volatility.

The third report covers Mutual Funds on the Cutline. There are currently 827 (last week 824) above the line and 32 below it out of the 859 that I follow.

Take a look:

1. ETF Master Cutline Report

2. ETF High Volume Cutline Report

3. MF Cutline Report

In case you are not familiar with some of the terminology used in the reports, please read the Glossary of Terms.

Last Week In Review: ETF News And Blog Posts To 5/12/2013

Ulli Market Review Contact

In case you missed it, here’s a summary of the ETF topics and market reviews I posted to my blog during the week ending on 5/12/2013.

Slow and steady was last week’s theme as the major indexes were bouncing along new lifetime highs. In the end, the S&P 500 added some 1.2% to close at 1,634.

Seems like the magic 1,600 marker is already in the rear view mirror as this bull continues to strut its stuff, thanks to the endless Fed contributions via their open ended QE program which, realistically, is the only reason the indexes are hovering in nosebleed territory.

Nevertheless, the trend is up, and we’ll continue to follow its path until a reversal becomes apparent at which time we will rely on our trailing sell stops to give us the signal to step aside.

Over past week, we covered the following:

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One Man’s Opinion: Will The Fed Slow Down Easing Before The First Quarter Of 2014?

Ulli Market Commentary Contact

92835431The Fed isn’t going to cease to inject liquidity until the first quarter of 2014 at the soonest, says Troy Gayeski, Senior Portfolio Manager at Skybridge Capital. Also, the Federal Reserve will not hike interest rates until end of 2014, early 2015. The more important recent catalyst, however, has been Japan’s aggressive monetary easing. That’s one reason why most hedge funds believe asset prices are going to inflate, he added.

Asked to comment about the market’s perception of tail risks and the measures needed to protect from the downsides, Troy said most hedge funds that run fixed-income portfolios tend to be duration neutral, which has been a bad strategy for the last 30 years.

However, at this stage of the cycle – with interest rates so low, it seems logical to be short duration. Though it’s a money losing trade, it seems to be a very good cost-benefit for guys who wish to hedge front-end risks if the Fed were to hike rates. No one expects the Fed to surprise the markets, but if it costs five or 10 basis points a month or a quarter to hedge a significant rate rise, then why not, he argued.

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