This month, I’m going to look at the Tactical Asset Allocation bond income strategy. We will compare the performance of this strategy to the ETF IEF. The new combination has outperformed IEF consistently over the past 10 years and is not correlated at all to the S&P 500 index. This allows you to load up on these positions with the hope that a big market sell-off will not hurt this trade.
The graph below represents this new model (the blue plot) compared to IEF (the red plot). What this graph shows is that the new model has more than double the average return of IEF with a much better Sharpe Ratio. As an example here are the April 2021 allocations.
17.56% SPDR Blmbg Barclays Convert Secs ETF (CWB)
82.44% SPDR Blmbg Barclays High Yield Bd ETF (JNK)
Sign up for Cromer Wealth Management’s Tactical Asset Allocation membership to get the current allocations. These trades are available to Bronze and Gold members.
