Global Sector ETF Rotation Portfolio

I gave an example earlier this week of a US sector rotation system using ETFs. This portfolio strategy uses the same rules, only with the iShares Global Sector ETFs. The momentum strategy that an investor could implement would be to purchase the best returning Global sector ETF(s) over the trailing 3, 6, and 12 months. This strategy has been written about extensively by Mebane Faber, author of The Ivy Portfolio.

I decided to use the results as of today's close, rather then June 30th like my previous post. The top 3 Global Sectors in order are IXN, RXI, and KXI. The full results are below:

As of July 16th Close
	3 Month Return	6 Month Return	12 month Return	Sum
Consumer Discretionary Sector RXI	9.83%	24.44%	-14.73%	19.54%
Consumer Staples Sector KXI	14.54%	12.10%	-9.87%	16.77%
Energy Sector IXC	11.24%	11.93%	-30.56%	-7.39%
Financial Sector IXG	18.54%	28.27%	-31.83%	14.98%
Health Care Sector IXJ	11.63%	3.37%	-15.77%	-0.77%
Industrial Sector EXI	10.59%	15.19%	-29.71%	-3.93%
Materials Sector MXI	15.76%	34.47%	-35.76%	14.47%
Technology Sector IXN	13.16%	32.82%	-16.08%	29.90%
Telecommunications Sector IXP	6.12%	5.82%	-21.83%	-9.89%
Utilities Sector JXI	12.82%	2.85%	-28.22%	-12.55%
Data Source: FINVIZ

An indivdual investor wishing to use an ETF rotation strategy for Global sectors could purchase the top performing ETFs and rebalance monthly. The fewer the 'top' ETFs purchased, the more volatility one could expect.

Going forward I will be updating these results monthly on Scott's Investments.

Disclosure: None

Comments

[Plaztikman:]

I currently use this method with the help of etfscreen.com

etfscreen.com/cchart.p...

Jul 17 12:59 PM

[Scott's Inv...:]

Yes, ETF Screen is another great resource and could be used to employ this strategy. Thanks for sharing!

Jul 17 01:37 PM