Performance Overview and Changes
Since this is the kick-off for the tracking portfolio for the Global Value Investing portfolio, there is no real-world performance results to review. Come back next month to see how the portfolio is performing.
Rules-Based Portfolio and Asset Selection
Each of the portfolios on this site use a rules-based investment approach. I try as hard as I can in my own portfolio to not allow emotions or my “gut” to get in the way. Instead, I look for well researched strategies that have worked in the past.
With each of those strategies, I set up a portfolio for the strategy here at Robotic Investing.
The Global Value investing strategy invests based on valuation; it buys the ten cheapest countries in the world based on data provided by Research Affiliates. If you need more detail on how I generate the list of ETFs the portfolio purchases, check out this post.
Here is the ranking based on expected return as of July 2, 2018:
* Note: I don’t personally invest in the Global Value Investing strategy directly. Instead, I have purchased IEMG, which is an emerging market index fund covering a basket of emerging markets.
Below is the updated portfolio tracking spreadsheet used to monitor the portfolio (use the scroll bars to move around the spreadsheet).
Here are the rules of the strategy:
- Trades country specific ETFs.
- When ready to build a Global Value Investing, go to the Research Affiliates website and enter the Asset Allocation tool under the Tools menu.
- Navigate to the “Expected.Returns.All” sheet, and sort the list by the “Expected Return (Nominal)” column. I set up data filters on the heading row, and the sort highest to lowest.
- Buy Rules: Buy the ETFs for the 10 individual countries with the highest expected returns. Buy each ETF using an equal weighting.
- Sell Rules: One year following the set-up of the portfolio, download a new version of the above spreadsheet and sort by expected returns as above. If any countries have fallen out of the top 10, then sell that country specific ETF.
- Rebalance: Replace any sold countries with the new countries that are now in the top 10. You should always have ten ETFs in your global value investing portfolio.