ETF YOURSELF: UPGRADED RESEARCH DECK NOW AVAILABLE!
Details below, plus a ROAR Score update
Rob’s introduction to this very important and information-filled weekly post:
It has been a busy week in many ways. Markets gyrating, finishing our ETF Yourself “makeover,” and doing the usual writing and research. We just went LIVE with the updated ETF Yourself research deck. This is the “control center” for my ETF research, and it includes several tabs devoted to the CORE ETF portfolio I have managed in various forms since the late 1990s: private accounts, mutual funds, and now for myself and as a research tool for subscribers.
It was also a busy media week. I was quoted in the Wall Street Journal last week, and as a result, we can now welcome many new followers to SungardenInvestment.com. If anything sums up my career as a professional investor, it is how my work is getting “discovered” now that I am in my 39th year in the industry. I am beyond grateful!
ROAR SCORE UPDATE: remains at 30
ROAR remains at 30, where it has been since I downshifted from 40 on 7/30/24 (S&P closed at 5,435 that day). SPY has had an adventure since that time, quickly dropping 6% before charging back. It is around 5,488 as I write this at 3pm on Tuesday, so about 1% north of where it was when I last adjusted it 6 weeks ago.
(If you are new to our proprietary ROAR Score, see below, as it is part of the updated research deck)
ROAR will be updated for subscribers “as it happens” since the way modern investment markets work, every day is potentially “live” for adjusting high-level market views. To be clear, given some of the questions we’ve answered during the past year about ROAR, it is a simple yet effective indicator. However, it does not “translate” into every portfolio move I make, whether in the CORE ETF portfolio, the YARP™ dividend stock portfolio, or anything else I do with my money (i.e. the basis for this subscription service).
That’s because ROAR is a “binary” decision: a mix of stocks and cash. That’s it. My strategy portfolios have more moving parts. Every individual stock, equity ETF, bond ETF, inverse (short) ETF, cash equivalent holding or option position tilts the overall portfolio’s balance in a way that ROAR cannot capture. That’s one reason that, after a brief hiatus “behind the paywall,” we are bringing ROAR back in front of the camera, so to speak. We’ll update it every Tuesday like we did here, for free and paid subscribers alike. And if I update it between one Tuesday and the next, paid subscribers will get that notice and an explanation immediately. And I’ll recap that for all the following Tuesday in this weekly post.
I write 4 times a week for etf.com, and the articles are wide-ranging. They are light research, observations and opinions about markets and investing, with an ETF angle. When I write one that I think is particularly relevant to our Substack audience, I let you know about it. As such, this link will take you to one that published today, about combining the flexibility and variety of ETFs and my bread-and-butter analysis, charting. Take a look, and you can also link from that article to see the more than 260 articles I’ve written for etf.com over the past 18 months.
That’s all a lead in to the main event for this week, at least as far as our budding investor community is concerned.
Here’s what’s new in our research service:
My ETF research is now divided into 3 separate, clean databases, which contain my proprietary ratings and grades for…
RESEARCH MAP: 90 US Equity ETFs I consider for the CORE portfolio (that list might creep up to 100 ETFs soon). Later this week I will be publishing a literal “market map” to help investors break down the big and complex US stock market into its many component parts and track intra-market performance trends.
50 “DIVERSIFIER” ETFs that I use to enhance and hedge returns. So many investors are solely US equity-focused, and don’t do much to hedge against rough market climates, which can last a decade or longer. So I have always believed in complementing that main US equity ETF exposure with some combination of bonds, inverse (“short”) ETFs, commodities and a few funky hedging mechanisms. It is all there in this tab.
40 BENCHMARK ETFs I use to track the global macro market picture at a glance. We have performance data on the 40 market segment proxies in there now. And based on subscriber feedback, we’ll consider adding more features to this tab.
The main RESEARCH MAP has been redesigned and pumped full of proprietary research from us. My technical grades are the key for me personally, but as the GUIDE TO THE RESEARCH DECK tab explains, my ratings are different from other folks. Markets move in sync too much to just assign the same rating across the whole stock market when it does. And our ratings prioritize risk over pursuing maximum return.
So at times, subscribers will see a lot of “middling” ratings so that I can highlight a smaller number of standouts. Also understand that ratings do not always translate directly to what I own in the CORE ETF portfolio. Analyzing a single ETF or stock is just one part of the portfolio management process. How to mix them together and rotate among them is the "secret sauce,” if you will.
As I will review in upcoming live sessions, I am now making available to subscribers some additional and formerly “internal use only” proprietary ETF research grades.
Those include analytical grades for:
VALUATION
LONG-TERM RISK
CONCENTRATION (of the stock portfolio)
NOTE: these grades are currently calculated on a progressive color scale, but we are converting to the color system described in the GUIDE tab within a few days.
As well as broader classification grades for:
EQUITY INVESTMENT SEGMENT
FOCUS AREA
ROLE (in the portfolio)
HIGH/LOW WEIGHT (that I consider in my portfolio when using that ETF)
And soon, we will supplement this quantitative and technical research with what I affectionately refer to as RWT: a Real World Trends summary. Think of it this way — if you wanted to consider an ETF, what are a few quick, bottom-line things you’d want to learn about it. Not 1,000-word reports, more like a trio of tweet-sized highlights. We’ll be doing this for the US Equity ETFs and the diversifiers, starting soon.
Later this week, we will be putting a limited data SAMPLE version of the ETF Yourself and SIRG research decks on the site. The functionality is just like the one subscribers get. The amount of information in the sample is less than the regular, paid version, and we will not update the data so it will get stale quickly. But we thought that the best way for someone who has not subscribed but is curious about doing so is to get a sense of the look and feel, prior to committing to service. Not to sound harsh, but we only want our research in the hands of people who will come to see it as a valuable tool, and a key aspect of being a part of the community of independent investors we are building.
Other sections of the ETF deck: ROAR, CORE and more!
Our proprietary ROAR Score is there, along with its full history. This is a simple but highly-effective “bottom-line” indicator I create that simply answers the question, “if I had $100 to split between SPY (S&P 500 ETF) and BIL (3-month T-bill ETF), what would that split be now? The percent allocation to SPY in that 2-ETF mix is the ROAR Score. I also track a portfolio using those 2 ETFs.
Now that we have included my CORE ETF portfolio strategy at the center of ETF Yourself service, that current portfolio allocation is naturally included. Full SIRG service subscribers already have this information as part of my total portfolio research deck, but it will be updated here for ETF Yourself subscribers, too.
And, we assume that anyone using or considering the service might be interested in things like seeing every trade I’ve made in CORE since the start of 2023, as well as the closed positions since June of 2023, to see the realized gains and losses, as well as their impact on the CORE portfolio.
AS A REMINDER: CORE ETF is a risk-managed, defense-first portfolio strategy. I created the contemporary version of it over a decade ago, with the goal of replacing what buy and hold bond portfolios used to do, but no longer can. The YARP portfolio is more growth-oriented.
That said, CORE has outperformed the “AGG” US bond index by 55% since 2013, and gained 11.5% with a 2.2% annualized standard deviation over the past 12 months, since we started publishing research on the Substack platform. That’s about 2% above the return of AGG with about 1/3 the risk.
As our longtime followers know, I am very critical of my industry’s overuse of past performance. So when you do see me site statistics about my own portfolio, I typically do so with a risk-management context.
That’s a lot of information, so we went back far enough to provide a fairly robust “due diligence” opportunity for people to examine, if they so choose.
As a reminder for those less-familiar with our service:
ETF Yourself is the ETF-only subset of our broader Sungarden Investment Research Group (SIRG) service that includes dividend stocks, options and deeper market insights.
ETF Yourself is how we started off on the Substack platform a year ago, and we are thrilled to let all paid subscribers know that the enhanced ETF research deck is now there waiting for you next time you log in!
Of course, if you are signed up for the full SIRG service, you get access to everything we do, so your SIRG research deck is updated identically to the one made available to ETF Yourself subscribers.
As a reminder, ETF Yourself is increasing in price to $125 a month (or $1,200 a year) starting with subscription renewals occurring on October 1, 2024 or later. So for all subscribers as well as those who are curious about what we offer there, there is a narrow “window of opportunity” to see the full service by signing up for a month at the current rate ($40) before it goes up on 10/1/24.
If it sounds like we have been working hard to make the SIRG and ETF Yourself services the highest-quality investment research, education and portfolio construction tools around…we think we have!
But of course, the ultimately judge of that is our subscribers. Through the SIRG service at SungardenInvestment.com (this site) and ETF Yourself (the ETF-only portion of the SIRG service, which is housed here but purchased at ETFYourself.com site (it’s a Substack thing!)), we are offering direct access to the process, toolset and ongoing decisions of a 30+ year market veteran and former fund manager with a non-traditional approach to all of the above (that would be me).
I work on my portfolio every day, and hope that the research and investment process I go through can help our subscribers save time and generate solid long-term returns, in large part due to the more sophisticated approach to risk management I adhere to in my own work. We built these services to allow others to learn from and with us as we navigate markets which are very different from those I found when I first started on Wall Street in 1986.
Good question, thanks for asking! I have stayed away from munis for multiple reasons. Since I am no longer acting in a fiduciary context as I did until I retired an advisor, individual tax situations make it difficult to discuss muni ETFs. More significantly, I have never had much interest in that area, as I am a total return investor and I put a high emphasis on credit quality. So while US Treasuries have their drawbacks, to me they are the purest way to invest in interest rate movements and pre-tax income return in the bond space. I also have my concerns long-term about many corporate and municipal issuers. Ticking time bomb in the case of some serially underfunded, poorly-managed segments of both worlds.
I hope that answers the question for you and other subscribers. Typical Rob the risk manager, eh? LOL.
Thanks again for writing in on this.
Thanks for saying so. As I said on the live session the other day. I think I’m in this for the right reasons. I suspect that’s why I’m not easy to find. We don’t yell loudly about our work 😀