U.S. Equity Sector Strategy

The QID U.S. Equity Sector Strategy is a long only, tactically defensive equity strategy that provide investors with U.S. equity exposure in the major economic sectors and sub-sectors of the U.S. economy.

The U.S. Equity Sector Strategy provides broad exposure to the U.S. equity market.  When fully invested and fully diversified, the portfolio is allocated equally across the ten major sectors of the economy.  Each sector allocation may consist of up to two sub-sectors. A single ETF represents each sector or sub-sector. The ETFs used in the portfolio may come from one or multiple sponsors and have been analyzed and ranked through a proprietary measurement methodology designed to optimize the use of specific ETFs at opportune times. This selection process incorporates a bid-ask spread adjusted performance metric that considers such factors as tracking error, liquidity, and cost efficiency. A quantitative signaling engine produces binary (on/off – own/don’t own) signals for each portfolio position delivering a rules-based discipline to investment decisions. The “on” sectors are equally weighted in the portfolio. Sub-sectors, with-in a sector, may not be equally weighted depending on their weight in a sector.

The Strategy will begin to build a defensive position, in 25% increments, when seven or more major sectors are “off”.  The strategy will go 100% defensive and be invested only in cash equivalents or U.S. Treasury instruments, when all ten sectors are no longer owned (i.e. 7 sectors “off” = 25%; 8 sectors “off” = 50%; 9 sectors “off” = 75%; 10 sectors “off” = 100% defensive).

The Strategy trades the next trading day after a signal is received. The minimum account size is $1,000,000.