My Signal-driven Allocation System (STAS) involves splitting an initial investment amount into 5 equal portions, and then allocating each portion to a different region/class (UK, Europe, US, Emerging Markets, Alternative Assets).
In each case, the basic choice is between equities (stocks & shares), government bonds and cash (except for the Alternative Assets portion). The investments in equities or bonds are then made via ETFs, and revised once per month on the basis of my moving average system.
So far this year, how has this system performed, and what ETFs is it currently invested in?
For the month of October 2013:
100% Equity ETFs (UK Small-Cap, EU Min. Volatility, US Small-Cap, Emg Mkts. Min Volatility, Japan Monthly FX Hedged)
STAS Performance, 2013 to date (as of October 10)
|STAS Fund performance by month|
|STAS Fund performance by sub fund|
So, so far so good, despite the drawdown suffered in August. Including trading costs, the fund has gained over 16% net of trading costs for the year to date, including small gains in September and so far in October.
While the biggest contributors to this strong performance have so far been UK Small-Caps, US low volatility stocks and the Japanese stock market, note that October has marked a strong rebound for Emerging Market stocks, held here in the form of an Emerging Markets Minimum Volatility ETF (EMMV). US Small-caps also continue to outperform the S&P 500 and add a useful contribution to STAS fund performance this month.