How well do my monthly ETF picks perform?
I publish a monthly newsletter which includes my Top 10 ETF picks, among other things. How well or how poorly have these picks performed in the 12 months following their publication to subscribers? Let's look at the numbers.
The Summary Table
I began publishing my Top ETF picks in January 2017. Every month I publish a new list of picks, often with names that are carried over from the previous month. I have a screening methodology that includes valuation metrics, price and volume momentum, and sensitivity to where we are in the business cycle. Each of my Top 10 ETF lists has performed well over the following 12 months.
Below is the summary table showing the 12 month returns for each list, and the benchmark I use for comparison. I chose the Vanguard Total World Stock Market ETF (VT) as the benchmark because it is the most widely diversified Global ETF I can find.
The last row in the summary table shows the Alpha, or the difference between the performance of my ETFs and the performance of the benchmark.
As you can see, my monthly ETF picks have captured Alpha every time. After a slow start in January and February 2017, the amount of Alpha I was capturing started to become meaningful. As time passes, and more of my monthly picks reach the 12 month mark, subscriber interest continues to build.
The fact that my ETF lists have not (so far) produced negative Alpha is also notable.
Next we look at the details of each monthly list, and how the individual ETFs performed. I'll start with the most recent list from April 2017, which just finished its full 12 months of performance.
The Monthly Tables
My list from last April did very well, with no losers and six Alpha producers. Next up is the list from March 2017.
This list had two losers, both in the commodities space. The other eight were winners, and produced strong Alpha for the 12 months. Next we look at the February 2017 list.
This list managed to capture Alpha, but not very much. Still, Alpha is Alpha. Only one ETF lost value, and again it was commodity based. The last list is from January 2017, which was a real squeaker in terms of Alpha.
A tiny bit of Alpha for my first swing at this game is good enough for me. Once again, commodities were the big drag on performance. Will I ever learn? Yes, I think I will.
Some Final Thoughts
If there is one thing I want to emphasize, it's this. These ETF performances are not cherry-picked, not coming from back-testing, and not manipulated in any way. They are all published and sent to subscribers of my monthly newsletter, and forever etched in stone, so to speak.
My monthly letter includes some other useful lists as well. I identify what I believe to be the 10 WORST ETFs at the time of publication. These are the ones that should be avoided or sold.
I also offer my top 10 stock picks, and my Top 10 Short sale candidates. Lots of ideas for subscribers to play with.
Maybe the most useful feature in the newsletter is my two models - a bear market probability model and a recession warning model. These two models help my subscribers make adjustments to their asset allocations, to either take more risk or dial back.
Why do my picks do so well? I think it all comes down to experience. I've been doing this for 30 years, as a professional equity trader and a portfolio manager. I eat my own cooking, which means I invest my own money in every strategy, every model portfolio, and every stock pick I make.
Check out the features of my monthly letter by clicking the button below.