Model Fund Portfolio Update: February 6, 2026
INVESTECH MODEL FUND PORTFOLIO CHANGE
Our AI Index collapsed this week as speculative investments experienced a sharp reversal in investor enthusiasm (see Market Insight). The Gorilla Index also broke support levels and is now -10% off its peak from late October last year. It continues to display weakness even through today’s market bounce. With gold’s sharp reversal followed by today’s rebound, we are taking advantage of the opportunity to secure further gains in GDX which remains up over+10% this year and +187% from the start of last year:
- Decrease the VanEck Vectors Gold Miners ETF (Symbol: GDX) from 4% to 3%. We already harvested profits off this holding just prior to gold’s peak above $5,000 last week. With broad weakness hitting the speculative areas of the market and now moving into the mega-cap momentum stocks, gold has shown less resilience and investing discipline dictates that we trim the position while still maintaining a holding in this defensive hedge.
Following this change, the Model Fund Portfolio is comprised of 58% long positions, 5% in an inverse index ETF, 5% in an intermediate Treasury ETF, and 32% cash held in short-term Treasurys or a money market fund. This results in 53% net equity exposure.
MACROECONOMIC UPDATE
- The Institute for Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rose more than expected in January from 47.9% to 52.6%, hitting its highest level since late 2022. The ISM Services PMI was unchanged at 53.8% as the service sector remained in expansion. Both sectors sitting in expansionary territory (>50%) is a promising sign for the economy. However, underlying data from the reports revealed rising inflationary pressures (see Market Insight).
- Consumer Sentiment ticked up slightly from 56.4 to 57.3 in the preliminary February reading. Attitudes remain historically low as concerns regarding personal financial wellbeing continue to plague consumers.
TECHNICAL UPDATE
- InvesTech’s Artificial Intelligence Index tumbled -32% below its peak from early November and our Canary Index broke through its support level from last year, confirming the weakness in speculative investments. The risk-off sentiment was especially prevalent in Bitcoin, which has now fallen -50% from its peak in early October of last year (see Market Insight).
- InvesTech’s Gorilla Index broke down as well this week, falling -10% from its high in late October 2025. A prolonged decisive fall in this Index would confirm the breakdown in the AI Index, Canary Index, and Bitcoin and signal that big investors are starting to head for the door.
