How Client’s Are Positioned for Q4 ’18


Since this blog’s last update on portfolio positioning in early July ’18, the weightings of the positions have changed little in the last three months.

With the creation of the Communications sector, Technology’s sector weighting has fallen to 20%, which was more in line with client’s weighting as of June 30, ’18.

Clients remain neutral-to-underweight Technology, Financials, Consumer Discretionary, and some assorted value stocks that remain “uncorrelated” to the cap-weighted indices.

Probably the biggest shift that has occurred below the surface is the continued increasing of Emerging Markets and non-US portfolio weights through the third quarter, 2018.

Clients are long VWO and EEM, and the OakMark International Fund managed by David Herro is the third position since clients should have access to Non-US developed markets as well.

The goal is to boost client’s EM and Non-US weighting to over 10% by the end of 2018.

China represents the largest emerging market and the world’s 2nd largest economy. The trade talks are worrisome for sure.

Goldman Sachs came out this morning and noted that iPhone sales have started to “rapidly decline” in China (their words, not mine) but the analyst kept his 80 million expected unit iPhone sales for calendar Q4 ’18, which given the comment was somewhat surprising. (China represents roughly 18% – 20% of Apple’s revenue and 22% – 25% of Apple’s operating income, with y/y China revenue growth between 10% – 20% the last 4 quarters. Apple’s fiscal 4th quarter end 9/30.)

This blog is trying video for the first time with this post, and would welcome readers constructive thoughts and comments. As the old saying goes, I’ve got a face for radio.

It was a busy weekend for blogging: there is a post the last 4 days.

Thanks for reading.







Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.