Tactical U.S. Equity Portfolios

The QID suite of Tactical U.S. Equity portfolios are long only, tactically defensive equity strategies that provide investors with U.S. equity exposure in the major economic sectors and sub-sectors of the U.S. economy.

The U.S. Tactical Equity portfolios are offered in two versions:

  • Tactical U.S. Equity Portfolio
    The Tactical U.S. Equity portfolio 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.  Also, each sector allocation may include one or more sub-sectors, with each sector or sub-sector represented by a single ETF. 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 weighting structure for each ETF used in the portfolio is designed to avoid increasing the weight to a specific sector that demonstrates a high likelihood to decline in value in the near term.

    The portfolio 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 nine or more sectors are no longer owned (i.e. 7 sectors “off” = 25%; 8 sectors “off” = 50%; 9 or 10 sectors “off” = 100% defensive).

    The Tactical U.S. Equity portfolio trades the next trading day after a signal is received unless there has been a trade on the same position within “trade date plus 3 trading days” (T+3). The minimum account size is $100,000.

  • Adaptive U.S. Equity Portfolio
    The Adaptive U.S. Equity portfolio 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. All sectors or sub-sectors are represented by a single ETF. 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 weighting structure for each ETF used in the portfolio is designed to avoid increasing the weight to a specific sector that demonstrates a high likelihood to decline in value in the near term.The systems controlling the signals of the adaptive strategy tend to react at a slower pace to changes vs. the tactical strategy, thus resulting in lower turnover. Long term, the tactical and adaptive models tend to provide similar results, however, due to lower turnover, the adaptive strategy may be more tax efficient.

    The portfolio 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 Adaptive U.S. Equity portfolio trades the next trading day after a signal is received unless there has been a trade on the same position within “trade date plus 3 trading days” (T+3). The minimum account size is $100,000.