We started the ETF Sector Rotation fund as an alternative to Swing Trading but also primarily for individuals with Retirement Plans (e.g. 401K). In the past, retirement plans had restrictions on what securities you could invest in but also how often one could switch. Thus, the concept of quarterly rotation was born.
With respect to what securities one invest their retirement funds, in the past individuals could only select from a “Family” of funds. Individuals had limited options and performance was not great by all standards. Over the past 10 years, Exchange Traded Funds (ETF) has grown in popularity and are becoming options with company sponsored plans. Individuals with Self Directed IRA’s are also finding them available as well. ETF exist for many key markets and make them a great alternative to regular mutual funds. Below is the list of ETF’s that ATGL currently uses for its selection process.
In starting the ETF Sector Portfolio, we started with an initial investment of $50,000 and purchased the Top 5 ETF’s based on Above the Green Line rules with the intent to close ALL positions at the end of each quarter and rebalance for the new period.
On Dec 31, 2020, we closed our ETF Sector Portfolio for its inaugural year. Shown below are results of the ETF Sector Portfolio for 2020. The 5 Funds were Sold on the Close December 31, 2020. On Jan 4, 2021, 20 % of the account value will be allocated into the new funds. The preliminary list of ETF’s for the 2021 First Quarter are: SPY, EEM, SLV, IWM, and QQQ. The final selection will be based on the closing numbers on Jan 4, 2021.
To see the current ETF Sector Portfolio, please visit our ETF Sector.
SLV is seeing some WSB activity this evening. Do you have a target price for this situation?
Chris Amador says
The first rule in the ETF Sector Rotation strategy is:
– Own the 5 Strongest ETFs based on Volume and 1 year Relative Strength
How is Volume used to help determine ranking?
Hi Chris. There is a Universe of 29 major ETFs to pick from, and the Highest Volume and required Relative Strength are used for the Selection.
This has been back tested but Results are NOT actual and may not be similar in the future.
ETF Sector Rotation back tested results.
Robert Scholz says
Why do you exclude managed ETFs such as ARKK and narrower industry ETFs?
ARKK has only done good Volume recently, but they have done a great job managing the Fund. Usually the narrow sector ETF’s don’t hold up well in the ETF Sector Rotation System when the Market rotates, but if the Volume holds up, we will add to ETF Universe.
We have traded ARKK 2 times in the Swing Trading Portfolio (after the 50-day avg. Volume > 1 MIL).