July has started off on the right foot with all listed strategies in the black.  Leading the way or the more growth-orientated equities of Momentum and Sector Rotation.  Trialing for the month, are portfolios with exposure to bonds as equities outpace fixed income securities.

Comments on this week’s report:

  • Over the trailing three-months, Momentum and Sector Rotation have outperformed all other listed strategies and is primarily attributed to their greater exposure to growth-orientated stocks and the market experiencing upward momentum.
  • Year-to-date Sector Rotation is outperforming its peers as its high concentration in the technology and industrial sectors (appoximately 25% each) has driven it to outperform.  However, for that same reason Sector Rotation has underperformed over the trailing 1-year period as its lack of diversification caused it to suffer a larger drawdown in the late 2018 market correction.
  • Contrary to Sector Rotation, Low-volatility is vastly 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.  Similar to Low-Volatility, Conservative portfolios that have a greater allocation to bonds, also benefited from their relatively lower drawdown in the late 2018 market correction.
  • 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.  Conversely,  Value based equities (which are stocks that are considered undervalued relative to other comparable companies) have trailed the overall stock market in most time frames.
  • 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.
Important Disclosures:  Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly from The Market Commentator℠, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for your portfolio.  Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in The Market Commentator℠ serves as the receipt of, or as a substitute for, personalized investment advice from The Milwaukee Company™.

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