The Logical-Invest monthly newsletter for March 2017

Logical Invest
Investment Outlook
March 2017

Our top 2017 strategies, year-to-date:

SPY, the S&P500 ETF, returned 5.79%.


  •  Our in-depth  2-hour QUANTtrader webinar, with Frank Grossmann. Get a behind-the-scenes look at our strategies.
  • We are testing a new U.S. Sector-based strategy that should be available in the coming months.


Market comment:

The S&P 500 is reaching new all time highs, currently at +10% from it’s previous support in the summer of 2016. It is following a straight line with no major corrections since the U.S. elections. This type of movement makes investors nervous about a coming correction. Interestingly, looking at the VIX term-structure we see the following picture:

VIX term structure March 2017
VIX term structure February 28th 2017

This is highly unusual. Having near-month VIX contracts at very low prices is normal as the SP500 is breaking upwards. What is interesting is that far-out contracts are at extremely low levels as well, making the curve somewhat flatter than normal. This implies that market participants expect low levels of volatility in the future, even 9 months out. We will see how this plays out in the coming months.

Our top 3 strategies are all U.S. market based and have achieved returns above 10% in just 2 months. Our Maximum Yield strategy, has returned an additional 4.1% in February, bringing year-to-date returns to 15%. Our 3x UIS strategy added 9% due to equity performance as well as a small upward reaction from oversold Treasuries. Our Nasdaq 100 added just 1.2% for the month. Of note is that the Nasdaq strategy has the lowest 60-day correlation to SPY, just 0.36, second only to our Gold-USD strategy’s 0.18.

Apart from our high flying strategies, it is worth mentioning and tracking our more defensive ones.

Our Universal Investment Strategy has shifted its bond allocations from TLT (the 20+ year Treasury ETF) and has been invested in TIP (the inflation-protected treasury ETF) since January. It has returned a stable 3.9%. The BUG (our version of the enhanced Permanent Portfolios) have benefited from a small rally in foreign bonds and convertibles, as well as U.S. equity, and returned 3.5%. Both have less than 2/3 of the 60-day S&P500 volatility. Our Bond Rotation strategy continues to be our favourite low-key performer returning +3.71 for the year.

We wish you a healthy and prosperous 2017.

Logical Invest, March 1, 2017


Strategy performance overview:

Logical Invest Performance February 2017
Logical Invest Performance February 2017
Visit our site for daily updated performance tables.


BRS – Bond Rotation Strategy
BUGST – A conservative Permanent Portfolio Strategy
BUGLEV – A leveraged Permanent Portfolio Strategy
GMRS – Global Market Rotation Strategy
GMRSE – Global Market Rotation Strategy Enhanced
GSRLV – Global Sector Rotation low volatility
NASDAQ100 – Nasdaq 100 strategy
WORLD-TOP4 – The Top 4 World Country Strategy
UIS – Universal Investment Strategy
UIS-SPXL-TMF – 3x leveraged Universal Investment Strategy
AGG – iShares Core Total US Bond (4-5yr)
SPY – SPDR S&P 500 Index
TLT – iShares Barclays Long-Term Trsry (15-18yr)

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NameCAGR 1y ▼
Leveraged Universal Investment Strategy38.0%
Maximum Yield Strategy27.5%
Volatility less than 15%22.8%
Max Drawdown less than 15%20.0%
Gold-Currency Strategy II19.5%

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