Welcome to the ETF Program. The ETF Program is an investment program that combines active macro alpha and strict risk control, all in an easy-to-follow solution for individual investors.
We visualize the simulated return path for the program below:
To today’s note. Our observations are as follows:
Macro assets are experiencing cross-asset trends consistent with strong nominal growth: equities and commodities are rising, while bonds are falling.
The business cycle remains in an expansion, pressures on monetary policy are now biased towards tightening, and capacity utilization is rising.
Our forward-looking macroeconomic regime probabilities indicate a predominance of rising nominal growth outcomes.
A procyclical asset allocation remains appropriate.
Let’s begin sharing the data that drives our current assessment of the macro regime and our subsequent risk management and positions.
Macro Trend Monitors
Asset prices in aggregate reflect changes in conditions relative to expectations. As such, carefully monitoring macro market trends is an integral part of evaluating conditions in the macroeconomy. To do this, we use our macro trend monitors, which we share here. We begin with stocks:
Equities trends remain strong and persistent. Next, we turn to bond market trends:
Bond market trends are meaningfully negative. We now move on to broad commodity aggregates:
Commodity trends have gained considerable strength. Finally, we examine our macro trend signals for gold:
Gold markets continue to show positive trends. Pro-growth assets continue to trend higher, while nominal bonds struggle.
Macro Cycle Monitor
Our systems aggregate a wide range of fundamental economic data to produce timely, proprietary estimates of the current stages of the macro cycle. We share some of these gauges, starting with our signals for business cycle conditions:
