After nine months, my rules-based SIF model portfolio is now dead level with its FTSE All-Share benchmark so far this year.
An encouraging period of outperformance during the summer has withered away, leading to a fall of around 3% during the third quarter. One reason for this may be the portfolio’s lack of exposure to the energy sector – Shell (LON:SHEL) and BP (LON:BP.) made decent gains in Q3 and are large enough to move the whole market:
However, I see this as a short-term headwind. I remain comfortable with the longer-term results my system has provided.
SIF has delivered an annualised gain of 7.3% since its inception in April 2016, compared to 2.2% for the FTSE All-Share index (both figures exclude dividends):
My main concern at the moment is that performance may be being held back by the portfolio’s heavy cash weighting – about 50%.
While I’ve previously viewed cash as a comfortable form of downside protection, I fear that I may have become too comfortable with cash. SIF is meant to be an equity portfolio,...
