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Ready to Rebalance?

20 June 2014 in Trading Ideas

Motif has just finished work on the rebalance of more than 100 of our professionally constructed motifs. That means you can now review your motifs for your individual rebalancing options – your eligible motifs are mentioned in the email we recently sent you or you can log into your account and view your positions.

Even better, until June 24, take advantage of our limited time offer that lets you stay up-to-date for 50% off – that’s just $4.95 total commission for rebalances on motifs created by Motif Investing.

The rebalance is our way of making sure that all motifs in the catalog remain true to the original compelling investing idea. Every day, businesses make key decisions about their operations. Companies enter businesses or exit businesses, they gain market share or find they can’t take the heat of competition.

Meanwhile, a hot new business sector may develop, as well as newly public companies that are already leading the way.

Our rebalances calculate these developments so that the motif adjusts to prevailing market conditions while remaining focused on its investing thesis. Rebalanced motifs still provide top relevant companies, and the same key sectors – while seeking an opportunity to diversify within a specific sector or idea to help reduce your concentration in any individual security.

Check out these examples from the latest rebalance:

Minimally Invasive Surgery: This motif has seen a number of additions and deletions during the rebalance, largely on account of a number of acquisitions. Over the past few months, three companies in the motif – Solta Medical, Given Imaging and ArthroCare – have been acquired, leading to a significant turnover in the motif. These three companies together had a 16.8% weight in the motif.

Johnson & Johnson has now become the largest weight in the motif, with an 18% weight, while Intuitive Surgical, which is a part of the Robotic Surgery segment, has a 15% weight. There is one IPO addition to the motif: Lumenis, which develops and commercializes energy-based medical systems.

Rising Food Prices: This motif has been significantly altered to follow inflationary trends. US food price inflation is expected to rise by 2.5% to 3.5% in 2014, higher than 2013, but roughly in line with long-term norms. Retail prices for certain meats, already at record highs, are expected to keep rising. For the year 2014, USDA forecasts beef and veal prices to increase by 5.5% to 6.5% and pork prices to rise by 3% to 4%.

 

Seeing these trends, two new segments were added to the motif – Meat Processors and Packaged Foods as food processors stand to benefit the most. Due to the two new segments, the motif witnessed 16 additions; the biggest additions were General Mills and Kellogg, with 19.8% and 16.5% respective weights in the motif under the packaged foods segment.

On the flip side, two segments – Fertilizers and Crop Protection – were deleted, as farmers and resource providers to farmers may not stand to benefit from rising food inflation.

As always, the decision to rebalance is up to you. Please consider your investment objectives carefully before you decide whether a rebalance is right for you. To rebalance your motifs now, click here.

Commission offer available for rebalance trades executed from Tuesday, June 10, 2014 at 12 AM EDT to Tuesday, June 24, 2014 at 11:59 PM EDT. $4.95 commission offer applies to only to motifs built by Motif Investing and viewable in the Professional Motifs catalog. Offer may not be combined with other offers.

Please refer to the Motif Details page for a particular motif to determine its rebalance schedule, which can be weekly, monthly, quarterly, semi-annual, or annual basis. Any motifs either customized by, or built by individual investors are not included as part of the rebalance schedule.

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