The Milwaukee Company’s Smart-Beta Performance Report is a weekly review of the performance of ten indexes that are managed using “smart-beta” asset allocation theories. This Report is for informational purposes only and should not be regarded as a substitute for independent research and personalized investment advice.
Comments on this week’s report:
- Month-to-Date “Passive” strategies, which have exposure to fixed income securities, have been largely underperforming all other 100% equity strategies listed as the stock market continues to rally. However, Passive strategies are still performing relatively well over the trailing 3-months as they benefited from their limited drawdown during the late 2018 market decline.
- Year-to-date Sector Rotation has been largely outperforming all other listed strategies as it benefited from its near 30% exposure to industrials (which has been the top performing sector for the year) and is near 30% exposure to technology (which is among the top performing sectors for the year).
- Over the trailing 1-year Sector Rotation has still been underperforming all other listed strategies due to its large amount of underperformance during the late 2018 market correction. However, it is quickly catching up to the other strategies as it has the best year-to-date performance.
- Contrary to Sector Rotation, Low-volatility is outperforming all other listed strategies by a large margin on a 1-year basis as it benefited from its relatively lower drawdown during the stock market correction at the end of 2018, while still participating in the more recent stock market rally.
- Despite the relatively poor performance from Momentum based equities over the trailing 3-months, over the trailing 3-year and 5-year periods they have largely outperformed as in those time frames the market has primarily experienced upward momentum.