There are changes to three iShares models this week.
There are changes to three iShares models this week. The iShares International Model (ISHRINTL) sold the iShares MSCI Brazil ETF (EWZ) and bought the iShares MSCI Taiwan ETF (EWT). EWZ 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 EWT as it was the highest-ranking fund in the matrix that was not already a model holding. EWT currently has a near-perfect 5.98 fund score, which is 1.62 points better than the average for all non-US equity funds, and a positive 2.43 score direction. On its default chart, EWT has completed five consecutive buy signals and reached an all-time high earlier this month. Year-to-date (through 6/24), the fund has gained 64.84% on a price return basis. In addition to EWT, ISHRINTL also has exposure to Israel, Italy, Peru, and South Korea. Year-to-date, the model has gained 23.92%.
The iShares Sector Rotation Model (ISHRSECT) sold the iShares North American Natural Resources ETF (IGE). 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.
IGE was sold because it reversed down into a column Os on its RS chart versus IYY, demonstrating short-term weakness against the benchmark. With the removal of IGE, the model now has exposure to biotech, technology, software, semiconductors, basic materials, digital infrastructure & real estate, and telecom. Year-to-date, the model has gained 15.59%.
The iShares Tactical Model (ISHRTACTICAL) sold the iShares US Oil Equipment & Services ETF (IEZ) and bought the iShares US Telecom ETF (IYZ). IEZ 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 IYZ as it was the highest-ranking fund in the matrix that was not already a holding in the model. IYZ currently has a favorable 4.24 fund score, which is 0.30 points better than the average for all technology & communications funds. Year-to-date, the fund has gained 22.42%.
In addition to IYZ, the model also has exposure to software, the S&P 500, semiconductors, aerospace & defense, US broker dealers & securities exchanges, digital infrastructure and real estate, and industrials. Year-to-date, the model has gained 13.21%.
