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Sector Rotation


Philosophy


The Leuthold Sector Rotation strategy aims to take advantage of the disparity in sectors during normal business cycles. We believe that long-term outperformance will be attained by the means of concentrating investments among the underlying equities within the dominant sectors and/or those sectors that appear poised for market leadership.


Strategy


A highly disciplined and unemotional approach is employed to evaluate equity sector risk/reward potential, based on our decades-long industry group ratings. On a monthly basis, a quantitative, top- down approach is utilized to rate equity industry-group attractiveness based on five categories of factors: Value, Growth, Profitability, Technicals, and Very Long Term (VLT) Momentum. The resulting industry scores are combined and applied at the respective broad sector levels. We seek to remain fully invested and do not use leverage or derivatives.


Portfolio Construction


Based on the monthly composite of industry-group scores applied at the sector level, the top-five- rated sectors are purchased for the portfolio; each sector position is held until it falls below the sixth-ranked spot. When a sector sale is triggered, it is replaced with the highest-rated sector not yet owned.

  • Portfolio construction begins with our model ranking domestic industries.
  • Each of the categories below is assigned a potential weight that reflects our decades-long experience in industry group investing.

Live Performance


Summary of Terms
Investment Type: SMA UMA
Minimum Investment: $50,000 Varies

Leuthold Weeden Capital Management (“LWCM”) was founded in 1987 and is an investment adviser registered with the Securities and Exchange Commission. Historical performance reflected above is for the Leuthold Sector Rotation Strategy, an equity style that is flexible and rotates among industry sectors and utilizes quantitative analysis. The Leuthold Sector Rotation Strategy seeks capital appreciation through the use of quantitative analysis, along with industry group selection and rotation to determine sector and industry overweight/underweight decisions. The strategy remains fully invested at all times. The current month’s performance is an estimate.

Returns presented for the Leuthold Sector Rotation Strategy assume reinvestment of all dividends, interest and realized gains. Gross Returns are presented before deduction of management and custodial fees, but after trading expenses. Past performance of the Leuthold Sector Rotation Strategy should not be considered predictive of future performance. As with any investment, there can be no assurance that LWCM’s investment objective will be achieved or that an investor will not lose a portion or all of its investment. The “Sector Rotation Strategy” composite was established on May 10, 2016.

S&P 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy based on the changing aggregate market value of these 500 stocks.

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