The SIACharts Hypothetical US 5-Stock Model has had a stellar year, and with the sale of Nvidia now behind us, shares of GE Aerospace (GE) have emerged as the standout performer for this SIA US Model. GE Aerospace, a global leader in jet and turboprop engines and integrated systems for commercial, military, business, and general aviation aircraft, has captured significant market attention. Its shares have surged 92.50% over the past year and have contributed 117.85% to portfolio performance since their initial purchase on March 14, 2023, at a price of $91.17. At that time, GE shares had entered the Favored Green Zone of the SIA Hypothetical US Model Universe, leading to the purchase of 16,437 shares. Prior to this, GE was in the Unfavored Red and Neutral Yellow zones, as highlighted by the shaded red oval in the chart. We also took note of additional purchases using the proceeds from the GE Vernova spinoff (3,132 shares at $138.15) and further acquisitions funded by the substantial Nvidia sale (1,268 shares at $164.67) as part of a portfolio rebalance. These GE investments have consistently delivered strong returns, and the shares seem poised for another breakout, as indicated by the green support lines. With a Beta of 1.73, any market rallies should continue to benefit shareholders of this $189 billion market cap giant. GE Aerospace, with an SMAX score of 9 out of 10, is showing exceptional near-term strength compared to other asset classes.
Turning to the SIA Hypothetical US 5-Stock Model portfolio, GE is positioned alongside Goldman (Financial), Costco (Foods), Oracle (Software), and Netflix (Media), creating a diverse lineup of top performers. The portfolio has risen 945.95% since inception, compared to the S&P 500 Index's 289.98% (based on 10-year performance and backtested beyond). This translates to a CAGR of 14.28% versus the benchmark SPX.I's 8.05% and a 70.14% YTD return versus the benchmark's 18.42%. The overall risk profile of the portfolio is measured with a Beta of 0.64, compared to the market's Beta of 1, and an Alpha of 2.37, with further diagnostics detailed in the attached table. Stock Selection Process: FOR ADVISOR USE ONLY The hypothetical stock selection process recommends the top 5 relative strength-ranked stocks from the SIA S&P 100 universe, ensuring only one stock per sector to maintain diversification. When a holding is sold, it is replaced by the highest-ranked stock from the Relative Strength rankings with a SMAX score of 6 or higher. If the top-ranked stock already represents a sector currently held in the model, the selection moves to the next highest-ranked alternative. The strategy will sell any investment that falls into the Neutral zone with a SMAX score of 5 or less or moves to the Unfavored zone.
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