A quick check of this weekend's TAQ snapshot will reveal that this blend picks up a couple percentage points on the return side while the shoter term (last 3 years) drawdown is effectively the same. Why is that?
Referring to yesterday's big picture post it's clear that XLK price behavior is less volatile that the Qs so the returns are more linear. Both ETFs have the AAPL bias going for them (or against them) but XLK deoes demonstrate a higher RSQ than the Qs. The price to pay is in total returns, where the Qs excel.
It should therefore come as no surprise that if we reverse the Qs and XLK allocations the results don't improve, in fact retrace below a strictly Qs position.
The addition of XLK to the TAQ portfolio looks like a good match going forward. Of course, all this is premised on the superiority of the Qs as an equity generating machine and the performance dominance of AAPL within that ETF.
What could go wrong with that scenario?
