For the month of April all listed strategies are in the black, with S&P 500 Equal Weighted, Value, and Quality equities at the top of the heap. At the bottom is Passive 70/30 – Conservative (i.e. 70% allocation to fixed income), and surprisingly Momentum given the performance of other 100% equity strategies.
Comments on this week’s report:
- Year-to-date Sector Rotation has outperformed all other listed strategies as its high concentration in the technology and industrial sectors (which were among the top performing sectors in that time frame) has driven it higher. However, for that same reason Sector Rotation has underperformed over the trailing 1-year period as its lack of diversification causes its returns to be more volatile and risky.
- Contrary to Sector Rotation, Low-volatility is outperforming all other listed strategies 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.
- Quality based equities (which are measured on ROE, accrual ratio, and financial leverage) have performed relatively well in all time frames as it remains at the top of the heap, and narrows its gap between the best performing Sector Rotation on a year-to-date and trailing 3-month basis.
- Momentum based equities have outperformed over the trailing 3-year and 5-year periods as during those time frames the stock market has primarily experienced upward momentum.