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