The SEAF Model (SEAF)

The flow of money is one of the only metrics we know of that actually leads price movement.  The SEAF Model “follows the money” to determine where investor assets are going, and where they are coming from, in US stock market sectors. This model tracks the total net assets invested in 11 Sector ETFs, in 3 different time frames, to determine the best opportunities to capture outright and relative performance in the sector space. This model is updated weekly, over the weekend when the markets are closed, through the closing date shown on the table.

The SEAF Model

 

How To Read & Interpret The SEAF Model
  • The leftmost column, Sector (Symbol), lists the 11 sectors of the S&P 500 as represented by the Select Sector SPDR ETFs
  • The next column, As Of (Date), indicates what percentage of the total assets invested in all 11 sectors each individual sector comprises through the closing date shown.
  • The next three columns show the percentage of the total assets invested in each of these sectors one week ago (the Trading time frame), one month ago (the Tactical time frame), and three months ago (the Strategic time frame.) 
  • Then, for the two sectors with the biggest percentage increase in inflows (green highlights) and biggest percentage outflows (red highlights) in each of the three time periods, we replace the percentage value with the actual date that trend of “being in the top two” began to provide some historical context to those sectors showing a significant trend of inflows or outflows.
Performance Data

The next two tables below display performance data for the SEAF Model through June 2022. The starting date is May 2020 because we had to allow for the data from the Communication Services Select Sector SPDR Fund (XLC, the newest addition to the Select Sector SPDR ETFs) to normalize to the rest of the data.  Each performance category is compared to the benchmark S&P 500 (SPX). The more significant comparisons are highlighted in green.

The first table below displays the quarter-by-quarter relative performance of the SEAF Model vs. the S&P 500, showing that SEAF has outperformed the S&P 500 in seven of the past eight quarters (88%) tested.

The bottom part of the table highlights SEAF’s relative outperformance versus the S&P 500 during 2022 year-to-date and since Q3 2020.

SEAF Qtr by Qtr Relative Performance

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The next table below compares quantitative performance vs. the S&P 500, showing that the SEAF Model:

SEAF Model Quantitative Data vs. S&P 500

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The chart below plots the daily performance of the SEAF Model vs. the S&P 500, in terms of percentage return, since May 2020.

Percentage Return: SEAF Model vs. S&P 500

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In this 13-minute video tutorial, Chief Market Strategist John Kosar explains Asbury Research’s SEAF (Sector ETF Asset Flows) Model. 



Disclaimer: This is provided for information purposes only and is not intended to be a solicitation to buy or sell securities. The performance indicated from back-testing or historical track record may not be typical of future performance. No inferences may be made and no guarantees of profitability are being stated by Asbury Research LLC. The risk of loss trading in financial assets can be substantial. Therefore, you should carefully consider whether such trading is suitable for you in light of your financial condition.