There were no changes to the recommendations from Northlake’s models for July.  The Market Cap model still favors Mid Cap and the Style model remains in neutral mode.  As a result, there will be no changes to the ETF holdings in client portfolios.  The Market Cap model will continue to be represented by the S&P 400 Mid Cap (MDY), while the Style model investments will remain split equally between the Russell 100 Growth (IWF) and Russell 1000 Value Value).

The Market Cap model moved slightly in favor of large cap with two internal/technical indicators shifting from small cap to large cap.  The indicators that shifted measure stocks vs. their 200 day moving average and the number of stocks making new 52 week highs.  The Style model moved toward value reflecting better recent performance for value stocks.  While the Style model remains solidly in value mode, a move away from the neutral reading to value is possible next month.

The Market Cap model performed well in the second quarter and so far in 2016.  The shift from large cap to mid cap beginning in May was timely.  For the quarter as a whole, the Market Cap model returned 1% more than the benchmark S&P 500.  Year-to-date, the Market Cap model is about one half of one percent ahead of the benchmark.  The Style model matched the S&P 500 in the second quarter and has also done the same so far in 2016.  The Style model has been sending a neutral signal since April 1^st.  Performance would have been better with a pure value signal but the benefit to client portfolios would have been marginal.

MDY, IWD, and IWF are widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg’s personal accounts.  Steve is sole proprietor of Northlake, a registered investment advisor.  Northlake’s regulatory filings can be found at www.sec.gov.