Global Portfolio Strategy: February 2015 Update

Global Portfolio Strategy: February 2015 Update

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.


The Strategy Had A Very Good January

Despite the weakness we saw in the US equity markets during the month of January, our global strategy performed better than expected:

jan performance portfolio

data provided by

As I have mentioned in past posts, this strategy has been very conservative over the past few months. As relative strength in global markets weaken, the strategy shifts into US Treasury Bonds (ETF: “TLT”).  The concept is that as investors become nervous, they shift assets into safe haven asset classes – such as US Treasury Bonds.

Inflows into the iShares Long Term Treasury ETF (“TLT”) rose in January due to increasing market volatility which caused investors to reallocate their portfolios from equities to bonds:

tlt inflows 2015


February’s Allocation

My global asset allocation strategy is rebalanced at the start of each month and is based on relative strength and moving averages.

For February, the model remains overweight in US Treasury Bonds and only adds the iShares MSCI Hong Kong Index ETF (“EWH”) to the portfolio:

feb portfolio


Perhaps investors are hoping lower oil prices will reduce export costs and are starting to look towards Asian markets for opportunities.

Either way it is clear that investors are still being cautious due to the rise in market volatility.


***Please note: I and/or my clients are long “EWH”, “TLT”, “SPY”, “QQQ” as of 2/5/15.

Questions? Thoughts?


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


John Rothe

CEO & Chief Investment Officer

Riverbend Investment Management


Note: All performance data is presented as backtested data. IMPORTANT INFORMATION ABOUT PERFORMANCE REPORTING and models can be read here: Disclosures



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