There are no changes to Northlake’s Market Cap and Style models this month after three consecutive months where at least one of the model recommendations changed.  The Market Cap model favors large cap while the Style model is neutral on growth and value for the second consecutive month.  This means that client accounts that use our models will continue to own the S&P 500 for large cap exposure and split Style exposure between the Russell 1000 Growth (IWF) and Russell 1000 Value (IWD).  We believe the recent volatility in the model signals represents a transitional period that will ultimately lead to better stock market breadth where large, mid, and small cap stocks and growth and value stocks perform more similarly.  The last nine months have had several periods of improved performance for small cap, mid cap, and value stocks but June saw a reversion to the long-running dominance of large cap growth stocks in the technology and interest sectors.  Client using thematic strategies but not Northlake’s models are overweight large cap and growth but maintain meaningful exposure to small cap, mid cap, and value stock index ETFs.

At the start of May, we shifted some small cap to large cap.  Beginning June 1^st, we moved from value to neutral.  These latest model shifts paid off in June when there was an unusually large differential in performance favoring large cap and growth.

We will have a lot more detail on Northlake’s models, thematic strategies, widely held individual stocks, and our updated market outlook in our quarterly letter that should arrive in your inbox around July 15^th.

SPY, IWF and IWD 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