Dynamic Sector Strength Strategy
How does the strategy work?
The Global Dynamic Sector Strength Strategy invests the majority of its holdings in one or two of the indexes below that have the strongest recent performance. The strategy will recommend from 60% to 85% of funds be held in the strongest performing index, and up to 30% of funds in the second strongest performing index.
- S&P 500 index.
- NASDAQ 100 index heavily weighted in technology sector.
- MCSI EAFE (Europe, Australasia and Far East) Developed Markets index.
- Emerging Markets index.
In addition to these indexes, the strategy also monitors a variety of sectors in the global investment world and will recommend up to 15% of funds be held in one of these sectors when the sector is out-performing the broader indexes above. The sectors include specific industries of the U.S. economy, as well as different country-specific funds.
Like all of our strategies, this strategy is designed to move from risky assets (stock indexes) to safety assets (bond indexes) when the broader indexes show weakness in recent performance. The intermediate-term government bond index (IEF) is used as a source of safety funds. When performance of IEF is negative, the strategy will recommend cash be held to limit losses to the portfolio.
|U.S. Large Cap||SPY||SPDR S&P 500 ETF Trust|
|Developed Foreign Markets||EFA||iShares MSCI EAFE Index Fund|
|Emerging Markets||EEM||SPDR S&P 500 ETF Trust|
|U.S. Technology||QQQ||PowerShares QQQ Trust|
|Government Bonds||IEF||iShares Barclays 7-10 Year Treasury Bond Fund|
|Cash||Cash||Cash held as United States dollars.|
|Annual Return (20 years)||11.1%||6.7%|
|Sharpe Ratio (20 years)||0.77||0.68|
|Drawdown Start / End dates||August 2021 to February 2023||October 2007 to December 2010|
|Max Drawdown length||18 months||38 months|
Latest Strategy recommendations
|Country / Sector||Sector Holding||Description|
|Singapore||EWS||iShares MSCI Singapore Capped ETF|
|South Korea||EWY||iShares MSCI South Korea Capped ETF|
|Brazil||EWZ||iShares MSCI Brazil Capped ETF|
|Internet||FDN||First Trust Dow Jones Internet ETF|
|China Large-Cap||FXI||iShares China Large-Cap ETF|
|Gold Miners||GDX||VanEck Vectors Gold Miners ETF|
|Biotechnology||IBB||iShares Nasdaq Biotechnology ETF|
|China Internet||KWEB||KraneShares CSI China Internet ETF|
|Russia||RSX||VanEck Vectors Russia ETF|
|Social Media||SOCL||Global X Social Media ETF|
|Semiconductors||SOXX||iShares PHLX Semiconductor ETF|
|Energy||XLE||Energy Select Sector SPDR ETF|
|Financial||XLF||Financial Select Sector SPDR ETF|
|Consumer Discretionary||XLY||Consumer Discret Sel Sect SPDR ETF|