The top five holdings in this financial exchange traded fund are Berkshire Hathaway Inc Class B (BRK.B, 8.66% of assets), Wells Fargo & Company (WFC, 8.55%), JP Morgan Chase & Co. (JPM, 7.71%), Bank of America Corporation Com (BAC, 6.12%) and Citigroup, Inc. (C, 5.50%).
Financial Select Sector SPDR ETF (XLF)
from InvesTech Research
In the Model Fund Portfolio we advise increasing the position in the Financial Select Sector SPDR ETF (XLF) from 6% to 9%. This takes our overall invested allocation from 80% to 83%.
On the 9/26/14 Financial Hotline, we recommended reducing the XLF position to 6% as it appeared the market was in the early stages of a correction, and Financials are typically one of the more susceptible sectors in a market downturn. Instead, the Energy and Materials sectors decisively led this most recent downturn.
With the correction now over and the market hitting new highs, we recommend increasing the XLF position. Even with the recommended 9% weighting, the Model Fund Portfolio remains underweight the Financials sector vs. the S&P 500 which holds 16% in financial stocks.
FOR NEW SUBSCRIBERS: Purchases after our initial recommendation must be made at your discretion. We currently advise bringing your portfolio in line with our recommended allocation by phasing in to the market over approximately six to ten weeks.
James Stack, InvesTech Research, www.investech.com, 800-955-8500, October 27 and November 14, 2014