April 16, 2026: We recommend the following change to our Model Fund Portfolio
This year got off to a rocky start and as risks increased prior to the conflict in the Middle East, we stepped up the allocation to our bear market fund in February. This position significantly helped reduce volatility in the first quarter and kept our Model Fund Portfolio in positive territory despite the sharp correction in the market.
While longer-term economic and market risks remain, major indexes have now rallied off their lows. Due to the easing of bearish Distribution and initial reemergence of a Selling Vacuum in our Negative Leadership Composite (NLC), we are incrementally trimming one layer of defense in the Model Fund Portfolio with the following change:
- Decrease the Direxion Daily S&P 500 Bear 1X ETF (Symbol: SPDN) from 7% to 5%. This holding was critical to the strength of the Model Fund Portfolio through market volatility earlier this year, and we are continuing to hold a 5% hedge as protection against the current market risk.
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.