There are changes to two iShares models this week.
There are changes to two iShares models this week. The iShares Tactical Model (ISHRTACTICAL) bought the iShares Semiconductor ETF (SOXX) and sold the iShares North American Tech-Software ETF (IGV). IGV was sold because its rank in the model’s relative strength matrix fell below the threshold to remain a holding in the portfolio. In its place, the model added SOXX as it was the highest-ranking fund in the matrix that was not already a model holding. SOXX currently has a near-perfect 5.92 fund score, which is 2.32 points better than the average technology and communications fund, and a positive 1.0 score direction. Year-to-date (through 1/14) SOXX has gained 10.2% on a price return basis. In addition to SOXX, ISHRTACTICAL also has exposure to gold, the S&P 500, silver, aerospace & defense, US broker dealers & securities exchanges, industrials, and consumer discretionary. Year-to-date, the model has gained 8.33%, outperforming the S&P 500 by more than 7%.
The iShares Sector Rotation Model (ISHRSECT) sold the iShares US Utilities ETF (IDU). ISHRSECT utilizes a relative strength versus benchmark methodology which compares each fund in the model universe against the iShares Dow Jones US ETF (IYY). Those funds showing near-term relative strength against the benchmark (i.e., are in a column of Xs) are included in the portfolio and are removed only when they show weakness relative to the benchmark. When an addition or deletion is made, the portfolio is rebalanced so each position is equally weighted. IDU was sold because it reversed down into a column of Os against IYY demonstrating short-term weakness against the benchmark. With the removal of IDU, ISHRSECT now has exposure to biotech, technology, software, semiconductors, financials, and telecom. Year-to-date, ISHRSECT has gained 1.18% on a price return basis, on par with the S&P 500.
