The Power Momentum Index Portfolio (Power Momentum Portfolio) has the objective of maximizing total return from income and capital appreciation with the preservation of capital a secondary objective. Power Momentum Portfolio is a rules-based strategy that employs an intermediate-term tactical overlay that is driven by technical signals to determine whether to be in a bullish or defensive posture by sector.
When in a bullish posture, the portfolio invests equally in 50 stocks, 5 from 10 different sectors. The stocks are selected based on having the highest risk-adjusted returns as of the last trading day of calendar quarter. The 10 sectors used in the portfolio are: Communication Services, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Industrials, Information Technology, Materials, and Utilities. Technical indicators are utilized on each sector individually to determine whether to be in a bullish or defensive posture. When in a defensive position, the portfolio will be invested in short-term U.S. Treasury Bond ETFs.
When in a bullish posture, the portfolio will reconstitute and rebalance holdings quarterly and re-constitute quarterly.
The Power Momentum Index Portfolio as a standalone strategy is appropriate for investors with a high risk tolerance. The portfolio is suitable for investors with a time horizon of five years or longer, as it can exhibit short-term volatility equal to or potentially greater than the overall stock market.