Notable observations from this rebalance period include the following:
- GURU’s index, the Solactive Guru Index, has outperformed the S&P 500, GURU’s broad-market benchmark, by 1.63% (163 bps) year to date through May 24th. Outperformance has been supported by a strong selection of Consumer Staples and Information Technology stocks throughout the year.
- GURU saw two net additions in Healthcare, potentially trying to capture opportunities in the worst performing sector of 2019, thus far. Also, GURU saw two net additions in Information Technology and one net deletion in Utilities, Energy, Financials, and Communication Services.
- GURU buys were mostly large cap and household names such as Apple, Adobe, The Walt Disney Company, Visa, among others.
- GURU is now 7.4% overweight Materials and 2.6% Consumer Staples relative to its benchmark. For the latter sector, GURU has had an average weight of 9.97% throughout the year and achieved an average return of 25%, demonstrating the strong selection within the sector.
- GURU is underweight Financials by 3.2%, which may signal aversion to the flat and somewhat inverted yield-curve. Also, GURU is 2.8% underweight Information Technology, possibly positioning for more concerns around the impact of US-China trade negotiations.