Increasing Emerging Markets Equity Exposure - 10/31/25

Trading
Written By Chris Gauthier, CFA - Chief Investment Officer

Portfolio Adjustments

 

    • Diversified Portfolios

      • Current Stock Exposure: 94.5%

      • Benchmark Stock Exposure: 85%

      • Sell: -2.5% GOVT: iShares U.S. Treasury Bond ETF.

      • Buy: +2.5% AVEM: Avantis Emerging Market Equity ETF.

    • CarbonLITE Portfolios

      • Current Stock Exposure: 94.5%

      • Benchmark Stock Exposure: 85%

      • Sell: -2.5% GOVT: iShares U.S. Treasury Bond ETF.

      • Buy: +2.5% CVMIX: Calvert Emerging Market Equity Fund.

    • ETF-Only Portfolios

      • Current Stock Exposure: 94.5%

      • Benchmark Stock Exposure: 85%

      • Sell: -2.5% GOVT: iShares U.S. Treasury Bond ETF.

      • Buy: +2.5% AVEM: Avantis Emerging Market Equity ETF.

    • Diversified Portfolios

      • Current Stock Exposure: 64%

      • Benchmark Stock Exposure: 60%

      • Sell: -2.5% GIBIX: Guggenheim Total Return Bond Fund.

      • Buy: +2.5% AVEM: Avantis Emerging Market Equity ETF.

    • CarbonLITE Portfolios

      • Current Stock Exposure: 64%

      • Benchmark Stock Exposure: 60%

      • Sell: -2.5% GIBIX: Guggenheim Total Return Bond Fund.

      • Buy: +2.5% CVMIX: Calvert Emerging Market Equity Fund.

    • ETF-Only Portfolios

      • Current Stock Exposure: 64%

      • Benchmark Stock Exposure: 60%

      • Sell: -2.5% JCPB: J.P. Morgan Core Plus Bond ETF.

      • Buy: +2.5% AVEM: Avantis Emerging Market Equity ETF.

    • Diversified Portfolios

      • Current Stock Exposure: 29%

      • Benchmark Stock Exposure: 30%

      • No trades.

    • CarbonLITE Portfolios

      • Current Stock Exposure: 29%

      • Benchmark Stock Exposure: 30%

      • No trades.

    • ETF-Only Portfolios

      • Current Stock Exposure: 29%

      • Benchmark Stock Exposure: 30%

      • No trades.

We wanted to share a brief update on a recent portfolio adjustment and the rationale behind it.

As part of our ongoing effort to keep your portfolio aligned with the data, we have reduced our exposure to bonds and increased our allocation to emerging market equities.

As you can see from the chart below from Ned Davis Research, the technical and foundational data based on the weight of evidence continues to improve for Emerging Market Equities. The current score of 75.7% has historically been a favorable level for adding to Emerging Market Equities.

Source: www.NDR.com

With our overall risk modeling still indicating a favorable environment for tilting into risk, we funded the purchase by reducing our over-weight to the more defensive fixed income asset class.

We continue to monitor the data and will remain nimble in adjusting allocations as risks and opportunities evolve. As always, our goal is to ensure your portfolio remains aligned with your long-term objectives and risk tolerance.

You’ll receive a trade confirmation from Charles Schwab reflecting these transactions. If you'd like to walk through these trades or discuss the positioning in more detail, we are happy to schedule a time to talk.

We're here to help you stay grounded, informed, and positioned for the long term, even when the market isn’t making it easy.

Warm Regards,
SCM Investment Committee

Chris Gauthier, CFA - Chief Investment Officer

I joined Stonehearth Capital Management in June 2013, bringing with me 15 years of investment management experience, working with both institutional and individual investors. As the Chief Investment Officer, I am responsible for setting the firm's overall investment policy and strategy including directing our asset allocation, investment risk, research, and portfolio management functions.

Prior to transitioning to Stonehearth, I was a partner at a startup U.S. Long/Short equity Absolute return hedge fund. I began my career at Putnam Investments, where I was a member of the Multi-Cap Growth team responsible for managing over $7 billion in assets, including 15 separately managed accounts. I earned my Chartered Financial Analyst (CFA) charter in 2004 and became a member of the Boston Security Analyst Society (BSAS).

I currently reside in Gloucester with my wife Jen and three children, Elizabeth, Sean, and Ryan. Outside of the office, I can be found in and around Cape Ann, enjoying the outdoors with my family or scuba diving off the coast.

https://www.stonehearthcapital.com/team
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