Each month I post an update to my global asset allocation strategy. This strategy is a relative strength, ETF based model that allows us to better gauge how global investors are feeling about the strength (or weakness) in the global economy and markets.
If you are not familiar with the strategy, here is a quick overview: “A Better Global Asset Allocation Strategy?”
Strategy Performance In 2015
After a phenomenal January, the model gave back some of its gains as the market began to shift from a defensive posture to a more aggressive (and positive) outlook for equities.
data provided by ETFreplay.com
March’s Global Asset Allocation Strategy Model
The shift back into equities continues – this month the strategy has shifted further away from safe haven holdings like US Treasury Bonds, and allocated a larger amount back into global equity markets.
Looser monetary policies in Europe have helped some European markets. Sweden, Germany, Belgium Switzerland and the Netherlands have all started to show positive relative strength within the strategy.
Meanwhile, the move out of US Treasuries is indicating that equity markets may be in for a nice Spring surprise as investors are becoming more aggressive:
I will be keeping a close eye on this trend to see if it continues. The one risk I see to the continuation of this trend is the lack of positive relative strength within emerging market countries.
Typically, aggressive moves away from US Treasury Bonds are accompanied with a stronger move from more aggressive emerging economies.
Instead, the strategy is moving into stable, European countries — a sign that there is still some risk aversion among global investors.
***Please note: I and/or my clients are long “TLT”, “SPY”, “QQQ”, “EWD”, “EWG”, “EWJ”, “EWK”, “EWL”, “EWN”
Feel free to leave a comment below or you can reach out to me privately here.
CEO & Chief Investment Officer
Note: All performance data is presented as backtested data. IMPORTANT INFORMATION ABOUT PERFORMANCE REPORTING and models can be read here: Disclosures
Front page/featured Image source: Wikimedia Commons/Aotearoa