Tactical Portfolio Update – US Sectors
Still bullish for Telecoms and Health Care
The ETF Radar Tactical portfolio is a model portfolio that invests in five ETFs based on an individual tactical ETF rankings system maintained by Cohne Investment Group. The portfolio trades at the end of each month. The holdings for June include iShares DJ U.S. Telecommunications (IYZ), SPDR-Health Care (XLV), SPDR-Consumer Staples (XLP), SPDR-Utilities (XLU) and iShares DJ U.S. Real Estate (IYR). North American stocks kicked off June with a sharp loss after disappointing readings on private-sector job growth and manufacturing activity prompted increasing concerns about a slowing economy. It‘s expected that the markets remain very choppy. Obviously the majority of portfolio managers is getting nervous – some expect a hard landing of the US economy. We remain bullish but see increasing levels of volatility over the next weeks.
Based on the rankings iShares DJ U.S. Telecommunications (IYZ) is the ETF of the month. Surprisingly, this fund is seeing unusually high volume in afternoon trading on Wednesday, June 1st with over 1.1 million shares traded versus three month average volume of about 349,000. Shares of IYZ were off about 0.7% on the day. The fund is dominated by three stocks which are AT&T Inc. (15,28%), Verizon Comm. (10,96%) and CenturyLink (8,67%). The sector outlook is still positive and may lead to future gains.
David Cohne, is Senior Advisor, Investment Strategy at ETF Radar. You can reach him directly under davidcohne [at] etfradar.com