AlphaProfit Fund Guide: NTF Growth Model Portfolio Repositioned on 05-18-10
The AlphaProfit No-Transaction-Fee (NTF) Growth model portfolio was repositioned on May 18 to align it with the evolving global economic outlook.
After staying strong for nearly four months in 2010, equity prices around the globe have hit the skids. The SPDR S&P 500 ETF (SPY) that tracks the namesake popular U. S. benchmark is up just 0.7% year-to-date. With Europe mired in a financial mess, the performance of stock prices in Europe has been notably worse. The Vanguard European ETF (VGK) and the iShares S&P Europe 350 Index ETF (IEV) are both down 15%. The Europe led-retreat has also pushed the iShares MSCI EAFE ETF (EFA) lower by 11% for the year.
Reacting to these results, Dr. Sam Subramanian, Managing Principal, AlphaProfit Investments, LLC and Editor of the AlphaProfit Sector Investors' Newsletter stated, "Investors are concerned on the impact of the European crisis on global economic growth and have scaled down their appetite for risky securities."
Meanwhile, legal actions taken by the Securities and Exchange Commission and the Justice Department against Goldman Sachs (GS) and calls for increasing regulatory oversight of financial institutions are weighing on investor psyche.
AlphaProfit's NTF Growth model portfolio was repositioned on May 18 after recording a 30% gain over the past 12 months to outperform the S&P 500 ($SPX) and the MSCI EAFE ($IEE) index by 4% and 18%, respectively. The model portfolio consists of best-of-breed no-load, no-transaction-fee domestic, foreign and specialty mutual funds.
Subramanian said, "AlphaProfit's multi-faceted process of selecting domestic, foreign and specialty mutual funds has reliably picked winners while managing to avoid big losers."
Returns from Janus Overseas (JAOSX), Matthews India (MINDX) and Parnassus Equity Income (PRBLX) have contributed to the portfolio's strong performance. See AlphaProfit Fidelity funds model portfolios performance.
Elaborating on the global equity landscape, Subramanian said, "Inflation is a major issue in China. The fiscal situation and growth prospects in Europe are not particularly appealing. The outlook for equities in the U. S. looks more exciting than in many other countries."
"Year 2010 could well turn out to be a year when the U. S. stock market performs better than foreign markets, both developed and emerging" concluded Subramanian.
Going forward investors need to be particularly selective with their foreign investments. Considering risks in some of the larger foreign markets, an indexed approach may not be well suited for the evolving global equity market environment.
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