Risk Profile: Aggressive Growth
Strategy Description: The CMG Tactical Equity Strategy seeks growth opportunities across global equity markets. The strategy utilizes a rules-based, relative strength investment process that evaluates price trends of over 400 global equity exchange-traded funds (ETFs). The strategy dynamically adjusts allocations within the portfolio, seeking to capitalize on a wide range of equity investment opportunities.
The investment process analyzes the individual price trends of more than 400 ETFs, allocating to the ETFs demonstrating the highest relative price strength. The strategy selects the highest ranked ETF in each of the following categories: U.S. equities, international developed equities and emerging market equities. A maximum of three ETFs are held with a 50% weighting to U.S., 30% international developed and 20% emerging markets. Embedded within the investment strategy is a disciplined, rules-based, risk-management process that enables the strategy to allocate up to 100% of the portfolio to short-term Treasury bills or other cash alternative ETFs.
The CMG Tactical Equity Strategy has a multi-step portfolio construction process:
- Global Investment Universe– The potential investment universe is comprised of 400+ ETFs encompassing the following global asset classes.
- U.S. equities: large/mid/small cap, value, growth and sector
- International developed equities: various developed market country-specific
- Emerging market equities: various emerging market country-specific
- Assets in Uptrend– The investment process identifies ETFs that are in defined uptrends. Only ETFs in a defined uptrend will be eligible for selection into the portfolio.
- Relative Strength Score –The investment process analyzes short-, intermediate- and long-term time frames to rank ETFs with CMG’s proprietary relative strength scoring system. ETFs that exhibit strong upward price trends with lower volatility will rank highest. Once selected, positions are re-evaluated after an initial holding period to confirm persistent relative strength.
- Portfolio Allocation: 50% domestic equities, 30% international equities, 20% emerging market equities.
- Global equity exposure that seeks to capture positive price trends while minimizing risk during periods of market decline.
- Flexible, active asset allocation adapts the portfolio to changing risks and market conditions.
- CMG’s TREND engine deploys a quantitative tactical process that adjusts to market conditions, and when prudent, lowering exposure and correlation to enhance traditional portfolio diversification.
Investment Objective: Capital Appreciation
Suggested Portfolio Positioning: Serves as a complement to a client’s traditional equity portfolio
Suggested Allocation: Typically representing 20-40% of a client’s equity allocation or 12-25% of a client’s total portfolio
Benchmark: MSCI All Country World Index
Morningstar Peer Group: World Allocation/Tactical Allocation
*No inverse or leveraged ETFs are used.
Past performance is no guarantee of future returns.
Want to continue the conversation?
Call us at (800) 891-9092. Or go to our contact form.