ECAM Asset Allocation Fund Update 27 Feb 2010

I've had a number of people request more information on how I manage my assets outside of the mandated Emirates A and B accounts.

As I discussed previous, I use a combination of strategic asset allocation along with technical market timing to either be invested in various asset classes or be in cash.

For those who would like to learn more, I would highly suggest you start by reviewing my previous information on the subject. Here is the link to the previous discussion:

http://emiratescapitalassetmanagement.blogspot.com/2009/12/ecam-asset-allocation-fund.html


Since that discussion the only changes I have made to the asset allocation model is within the non-US stock asset class (increasing the percentage in Emerging Markets stocks from 10% to 15% and decreasing the percentage in Foreign Large Cap stocks from 15% to 10%).

The table below shows the model breakdown:


Click on all charts to enlarge:



As can be seen, this model provides exposure to a much larger percentage of the investment universe. The reduced correlation amongst the various asset classes provides stability to the model and the use of technical analysis applied to the model allows for the capture of profits (and the reduction of losses) individually based upon the performance of each asset class.

In an effort to give you some insight into the rates of return, I will publish monthly my current holdings and rates of return.

Currently the fund is 50% invested and 50% in cash. The rotational nature of the fund model took profits on 50% of the fund in late January, 2010. Several other asset classes are still currently open but sitting on "pending" sell signals (as annotated on the charts).


The 50% currently invested is broken down as follows:

-40% currently invested in core holdings (Large Cap stocks 10%, Small Cap stocks 5%, Total Bonds 10%, Inflation Protected Bonds 5%, and US Real Estate 10%).

-10% discretionary part of the portfolio is adjusted weekly as required. Currently it is invested in KOL (coal mining stocks ETF) and GDX (gold mining stocks ETF) with a 5% weighting to each.

I've included charts of the various core positions (90% of the fund) and rates of return. As the 10% discretionary portion of the model changes more rapidly (on a weekly basis) I will not include those charts to keep things simple.



US Domestic Large Cap Stocks (10%):



-VTI issued a buy signal 30 Mar 2009 @ 41.64

-Position is currently open with price @ 56.23

-Current return +35.0%



US Domestic Small Cap Stocks (5%):



-VB issued a buy signal 30 Mar 2009 @ 39.50

-Position is currently open with price @ 58.09

-Current return +47.1%



Established International Markets (non-US) Stocks (10%):



-VEU issued a buy signal 30 Mar 2009 @ 29.90.

-Position was closed 25 Jan 2010 @ 41.10.

-Captured Return +37.5%



Emerging Markets Stocks (15%):



-VWO issued a buy signal 23 Mar 2009 @ 23.97

-Position was closed 25 Jan 2010 @ 38.24

-Captured Return +59.5%



US Total Bond (10%):



-BND issued a buy signal 24 Nov 2008 @ 72.95

-Position is currently open with price @ 79.61

-Current return +9.1%



US Inflation Protected Bonds (5%):



-TIP issued a buy signal 15 Dec 2008 @ 97.22

-Position is currently open with price @ 103.91

-Current return 6.9%



US Real Estate (10%):



-VNQ issued a buy signal 06 April 2009 @ 28.95

-Position is currently open with price @ 44.63

-Current return +54.2%



Non-US Real Estate (5%):



-RWX issued buy signal 06 April 2009 @ 24.09

-Position was closed 19 Jan 2010 @ 33.71

-Captured Return 39.9%



General Commodities (10%):



-DBC issued buy signal 05 Oct 2009 @ 22.70

-Position was closed 25 Jan 2010 @ 22.69

-Captured Return 0.0%



Soft Commodities (10%):



-DBA issued a buy signal 12 Oct 2009 @ 26.09

-Position was closed 25 Jan 2010 @ 25.30

-Captured Return -3.0% (loss)



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dwaynemalone1@gmail.com