Muscular Portfolios :: ETF Screen

The Mama Bear Portfolio

The Mama Bear is based on the book Muscular Portfolios (BenBella Books, 2018) by Brian Livingston. The portfolio is a clone of a strategy tracked since 2006, as publicly disclosed by Steve LeCompte, CEO of the CXO Advisory Group.

The Mama Bear is designed to (1) keep losses small during bear markets, (2) underperform the S&P 500 with less volatility during bull markets, and (3) wind up with superior performance over each complete bear-bull market cycle.

The investing menu consists of low-cost exchange-traded funds (ETFs) that track nine asset classes. Your portfolio allocates roughly equal dollar amounts to the three ETFs with the strongest momentum, as determined by the strategy rules.

The table below updates a couple of hours after the close every market day. But don't trade every day! Check and tune up your portfolio only once a month, on the same day of your choosing. The best gain is achieved by reallocating on or around the last trading day of the month (see Newsletter #28).

Asset class	5-mo. gain	ETF symbol	Price	Buy
Gold	+25.36%	IAU	63.82	34%
Developed-market large-cap stocks	+16.25%	VEA	55.74	33%
Emerging-market stocks	+11.20%	VWO	48.28	33%
US real-estate investment trusts	+2.97%	VNQ	89.58	—
US Treasury bonds, 20+ yr.	+2.21%	VGLT	55.09	—
US Treasury bills, 1 to 12 mo.	+1.36%	SHV	110.25	—
Commodities	+0.80%	PDBC	13.81	—
US large-cap stocks	+0.75%	VONE	271.32	—
US small-cap stocks	-9.00%	VIOO	98.06	—

Performance data calculated on June 17, 2025, at 7:02 pm ET (market closing prices).

Strategy rules:

Select any consistent day of the month to reallocate your portfolio — ideally on or around the last trading day of each month.
Momentum Rule: Before the market closes on your chosen day, note the ETFs with the highest 5-mo. gain (the green rows with a Buy percentage).
If, because of a previous month’s rankings, you already own all of the ETFs in the green rows, do nothing.
Sell any ETF you own that now has no Buy percentage.

Use the cash from any sales to buy any indicated ETF you don’t already own. Exact percentages are not crucial.
Hold each of the top 3 ETFs, whether the 5-month gain is positive or negative. Even if slightly negative, the strongest ETFs tend to rise in the following one month or more.
Once purchased, there's no need to rebalance an ETF back to its exact Buy percentage unless the ETF is more than 20% off its target dollar amount.

Execution Rule: Buy or sell an ETF only if its bid-ask spread is less than 1.0%. (If greater than 1.0%, a "flash crash" might be occurring. Check an hour later to see whether an orderly market has been restored.) Popular ETFs typically have spreads below 0.2%, but some bond and commodity ETFs have legitimately higher spreads due to greater trading expenses.

KEY TO STATS

5-mo. gain is equal to an ETF’s nominal total gain (including dividends) over the past 105 trading days.

Prices and returns are recalculated approximately 2 hours after market close.

A flash crash is a temporary situation lasting a few minutes, during which prices and spreads suddenly move far from their typical values.

Muscular Portfolios, the Mama Bear Portfolio, the Papa Bear Portfolio, and the Baby Bear Portfolio are registered trademarks of Publica Press and are used under license.

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