Global Asset Allocation Strategy: November 2014

Global Asset Allocation Strategy: November 2014

global asset allocation strategy etf

Each month, I update my global asset allocation strategy. This strategy is used as a relative strength based, research model that provides insight into how global investors are allocating their portfolios.

Review Of October’s Allocations

Last month we saw global investors becoming more cautious as the model shifted into US Treasury bonds.

October was a relatively volatile month for US stocks, and the model’s allocation in US bonds helped the model miss the more extreme downturn:

October relative strength portfolio

source: ETFreplay 

This Month’s Allocations

For November, the model still remains overweight US Treasuries (ETF: TLT), and adds positions in Australia (ETF: EWA) and Hong Kong (ETF: EWH):

november relative strength model


Global Weakness VS The US?

I do want to note that this model is underperforming the S&P 500 since late summer. This may be an indication that the US markets are more in favor than their global counterparts:

Model vs SPY (S&P 500):

spy model

Model vs VEU (Vanguard FTSE All-World ex-US):

spy vea

The outperformance of US equities vs non-US equites is also being confirmed by my US trading models.

Additionally, high beta sectors, like Biotechs, have been outperforming the S&P 500 index since the mid-October low:


For now, it seems investors appetite for risk is back on.

High beta, US equities are back in favor as global investors seem to be favoring US equites.

Questions? Thoughts?


Feel free to leave a comment below or you can reach out to me privately here.

– John

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