Welcome to Prometheus ETF Portfolio. The Prometheus ETF Portfolio aims to allow everyday investors to access an investment solution that combines active macro alpha, passive beta, and strict risk control, all in an easy-to-follow, low-turnover solution. We aim to achieve strong risk-adjusted returns relative to cash, with limited capital drawdowns in depth and duration. We do this in a highly accessible package, which rotates between five highly liquid ETFs, readily available to any investor with a brokerage account. Without further ado, let us dive into our assessment of macroeconomic conditions:
Our key takeaways are:
- Market Monitor: Over the last week, markets moved to price in incrementally higher odds of rising nominal growth conditions. A significant portion of this move was the continued fading of extremely strong pricing of disinflationary forces. While the Fed eased 50bps, this easing was almost entirely front run by markets, leaving bonds with little to rally on this week. We will be watching the next few weeks carefully to assess odds of a market regime shift.
- Economic Data Monitor: Economic data momentum rose significantly over the last week. Key business cycle data all surprised expectations and showed positive outcomes. While we continue to view this economy as one that is slowing, these latest prints point more to expansionary conditions than to slowing ones. We expect the easing to be inadequate to re-ignite a broad-based upswing in the economy at this time, but that is a theme we will monitor over coming months.
- Performance Updates: Our long-only portfolio was up 0.40% this week on the back of strong bond market returns. Our ETF Portfolio is once again at All-Time Highs following this performance.
- ETF Portfolio Positions (Upgraded): Our ETF Portfolio is Long SPY (20%), Flat DBC (0%), Long IEF (60%), and Long Gold (20%). This allocation has an expected annual volatility of 7%.
You can access the full note below: