May 6, 2022: We recommend the following changes…

There has been further deterioration in both the technical and the macroeconomic landscape, warranting an additional incremental reduction in our Model Fund Portfolio allocation. As such, we recommend the following changes:

• Reduce the allocation to the Invesco S&P 500 Equal Weight Consumer Discretionary ETF (symbol: RCD) from 4% to 2%.
• Reduce the allocation to the Invesco S&P 500 Equal Weight Technology ETF (symbol: RYT) from 11% to 9%.

This trade brings the net invested allocation of the Model Fund Portfolio down to 51% (61% long positions plus 10% in an inverse index ETF).  The remainder of the Portfolio (29%) is held in short-term Treasurys or a money market fund. Further adjustments will continue to be made based on developments in the weight of the evidence.

Note: For those who have questions about how inverse index funds reduce the net invested allocation of a portfolio, please see our The “Bare Necessities” About Bear Funds report.