Re-balance Cycle Reminder All MyPlanIQ’s newsletters are archived here.

Regular AAC (Asset Allocation Composite), SAA and TAA portfolios are always rebalanced on the first trading day of a month. the next re-balance will be on Wednesday July 1, 2020.

Please note: As of March 1, 2020, we officially phased out our old rebalance calendar for both SAA and TAA. They are now always rebalanced on the first trading day of a month. 

As a reminder to expert users: advanced portfolios are still re-balanced based on their original re-balance schedules and they are not the same as those used in Strategic and Tactical Asset Allocation (SAA and TAA) portfolios of a plan.

Industry Sector Rotation With Composite Momentum

We have tracked and regularly reviewed how a momentum strategy works at various levels (see, for example, August 20, 2018: How Momentum Investing Stacks Up? and April 30, 2018: Momentum Investing Review).  In this newsletter, we will take a closer look at how our composite momentum strategy has performed at industry sector level. 

Composite momentum on fidelity select mutual funds

Perhaps one of the biggest and uinique advantages to have a Fidelity brokerage account is to access Fidelity’s famous select mutual funds. These mutual funds have names starting with ‘Fidelity Select’. For example, Fidelity Select Software & IT Services (FSCSX) invests in software and IT companies such as  Microsoft, Google and Mastercard while Fidelity Select Gold Stocks (FSAGX) holds gold mining stocks such as Newmont Corp (NEM) and Barrick Gold (GOLD). Even though in the past 20 years, more and more industry sector focused ETFs have been introduced, Fidelity select funds still offer more industry comprehensive, let alone they have existed for a long time. 

Investing in industry group focused funds with highest momentum has been a popular strategy every now and then, depending on how these portfolios had performed. Let’s first take a look at P Composite Momentum Scoring Fidelity Select Funds, a portfolio listed on Advanced Strategies page. The portfolio selects top two Fidelity select funds that have the highest momentum scores each month to invest. However, the portfolio also applies a composite momentum score on general market conditions and it can invests in an intermediate term Treasury bond fund when it deems that broad markets are in a downtrend using our composite momentum score. 

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