DALI has seen some change with respect to its asset class ranks as Fixed Income and International Equity continue to jockey for the number two position. Currently, the two asset classes are tied, each with a tally number of 210.

With Friday’s market action, the International Equity Asset Class lost a buy signal bringing the tally number for this asset class down to 210.  As well, the Fixed Income Asset Class picked up two buy signals in order to bring that tally number for Fixed Income up to 210, thus causing a virtual “tie” in terms of the tally ranking number between International Equity and Fixed Income.  Keep in mind, this does not take into account Monday’s market action that saw quite a bit more volatility within the International Equity markets, so there is a good chance that when the dust settles and Monday’s market data is incorporated that we will see a “clear” winner between Fixed Income and International.  With that said, as we look at the current “DALI Snapshot” there are a few clear takeaways:

• US Equity continues to dominate the asset class ranks in the number one position.  The tally number of 342 is head and shoulders above Fixed Income and International Equity at this time, and over the course of the past month this number has continued to grow for US Equity.
• Since December 2012, Fixed Income and International Equity have been jockeying for position, and neither has been able to distance itself from the competition.  Going back over the past two and half years these two asset classes have switched positions between second and third place rankings four times now.  We will see if, in this case, the fourth time is the charm for a clear leader emerging.
• For those following “DALI Strategies” page, in order to see a change we need to see one of the two asset classes win by 5 in order to be established as the winner.  In the example we are talking about today, Fixed Income is only going to remove International Equity from the sample allocations on the DALI Strategies page if the tally number of Fixed Income overtakes the tally number of International Equities by five signals or more. 
• The Commodity Asset Class remains in the basement of DALI.  Interestingly enough, Commodity has been ranked in the bottom two positions for more than three years now, since June 2012.

In the "Defensive Preparedness" article of this report there is some more discussion about the recent activity within DALI, and what that means for your portfolios.  We will continue to monitor this situation very closely, and be sure to keep you up to date as this continued battle between International Equity and Fixed Income continues to play out.