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.
|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.