For the month of April S&P 500 Equal Weighted, Value, and Quality equities have outpaced all other listed strategies. Meanwhile, Sector Rotation, Momentum, and Low Volatility have fallen behind all other listed strategies for the month, including those allocated to as much as 70% and 50% bonds (i.e. Passive 70/30 and Passive 50/50).
Comments on this week’s report:
- 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 surpassed Sector Rotation on a trailing 3-month basis.
- 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 caused 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.
- 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.